ATM - A2 Milk Corporation Limited

[Beagle]

I agree - they always have tons of cash. How many fastly growing companies can say that?

Just one that I can think of mate

[winner69]

beagle says — this company is shaping up as the premier growth stock on the NZX ....

NO NO you are WRONG

It’s the premier growth stock in the world

Already getting US punters interested .....watch the rush as they come after your shares

[Beagle]

pe still very high ... expensive if your buying now i reckon

Do you really expect to buy a company growing earnings at 150% on a market average PE for 2018 earnings of about 22 ? If so its time for a serious reality check mate.
Companies growing earnings at this rate on the NASDAQ can trade at 100 times earnings or even more ! Bottom line is the PEG (Price earnings to growth) is just on 0.2. Anything less than 1 is considered good value. 0.2 is exceptional value and I would reiterate, for much of this half they were product supply constrained !
My one reservation with this company about how they are going to source enough A2 raw milk in the future has been solved with the Fonterra strategic agreement.

[couta1]

pe still very high ... expensive if your buying now i reckon

No it's not, will be double it's current price within 3 years, you read it here first.PS-Please make a note in your diaries so you can hold me to it, remember 21/2/2021.

[blackcap]

http://nzx-prod-s7fsd7f98s.s3-websit...467/274777.pdf

This is a phenomenal result in its own right, (EPS which is what really counts is up just on 150%) but when you consider that for much of this half they were supply constrained (Synlait's doubling of canning and drying facilities only kicked into gear in November) the future growth prospects look truly exceptional especially with the strategic arrnagements with Fonterra which look to secure their long term supply arrangements.

Synlait, (I also hold) will do just fine with their recent doubling of capacity and other growth initiatives.

For those that think the PE is too high I note half year EPS of 13.7 cps. It should be plainly obvious with the doubling of supply capability of Synlait now in full swing that the company should easily eclipse EPS for the full year of an absolute minimum of 30 cps, (my target is higher) and at $9.30 that puts ATM on a 2018 PE of 31.
This company is shaping up as the premier growth stock on the NZX and I think that PE is very cheap for the way the company is growing and its medium and long term growth opportunities.

ATM presents as an outstanding opportunity for shareholders to build wealth going forward. Disc: I topped up late last week and again yesterday.

Exactly.. and my father bought at 10 cents about 10 years ago. Imagine his delight!

(he did sell some when the SP rocketed to 50 cents during 2012)

[winner69]

Do you really expect to buy a company growing earnings at 150% on a market average PE for 2018 earnings of about 22 ?
Companies growing earnings at this rate on the NASDAQ can trade at 100 times earnings or even more ! Bottom line is the PEG Price earnings to growth is just on 0.2. Anything less than 1 is considered good value. 0.2 is exceptional value and I would reiterate, for much of this half they were product supply constrained !

What does the Graham formula you all love give as an intrinsic value

[Sideshow Bob]

You also think this is big acknowledgement by Fonterra that they need to jump onboard with ATM rather than try and compete a losing game. Good result for both companies.

Theo a bit keener on A2 than what he was in the past? Maybe keen to back a winner??

[bull....]

the average pe for dairy companies is what should be compared against , its not a tech company lol

[Sideshow Bob]

What does the Graham formula you all love give as an intrinsic value

I'm looking forward to Snoopy's valuation. May have crested $3.50 by now.....

[Beagle]

the average pe for dairy companies is what should be compared against , its not a tech company lol

]
Quite oibviously I was using tech as an example because its so hard to find companies growing eps at 150%. Good luck trying to buy them on a multiple other dairy companies trade at.