ATM - A2 Milk Corporation Limited

[Biscuit]

...."Never drink and buy into a downtrend, you bl**dy idi*t". .....

I often buy in a downtrend and it usually works out reasonably well (though not always, and I have lost my shirt previously doing that). I bought more ATM a couple of days ago. I see an export company with a proven ability for double digit profit growth, expanding into huge markets. I think the current woes are primarily covid-related and doubt there is any reason to see them as representing a fundamental change in the company or market. If that is true, the company will eventually resume growing and the share price will eventually recover.

[macduffy]

If that is true, the company will eventually resume growing and the share price will eventually recover.

Big word, that little "if"!

I've been investing for over 50 years and have made all the mistakes at least once. My biggest lesson has been not to buy in a downtrend but to wait until the worm turns. I miss the absolute bottom, but usually save a lot of angst for a very minor cost. Just my way, of course.

[kiora]

It pays to listen to veterans even if they are novices
No one could ever possibly know it all but some rules are definitely worth remembering

[Biscuit]

I've..... made all the mistakes at least once. ...

The first principle of science is to have sufficient replication in an experiment in order to attain significance. The second principle is to repeat all experiments several times until you are certain the result is consistent only then can you make a conclusion.

[xp04]

OK - shall we talk for a change about ATM, shall we?

They are still on my watchlist and I could imagine buying some at some stage again. However ... this does not look like an uptrend:

Attachment 12241

From a more fundamental perspective ...

Not sure I would call the board a see of red flags, but they certainly didn't came smelling like roses out of the Hrdlicker saga. Is there any evidence that they have learned from their mistakes and been more skillful in picking the next CEO? Do we know when he starts anyway, or is he still pondering whether he really wants to take the job?

Looking into the history of the second down grade ... did anybody feel that they have a good command and understanding of their trade channels, or did it more feel like the downgrade crept upon them as surprise because they don't really understand their sales channels?
In my view was the story not really a recommendation for a switched on management team knowing what they are doing ....

ATM is still not really cheap. Sure - a forward PE of 21 combined with a forward growth CAGR of 25 sounds really sexy, but only if the analysts predictions come true. What evidence do we have that they might be right? If we learn from the past ... analysts said 12 months ago the stock is an accumulate (i.e. should grow better than average), but SP dropped in 12 months by 30 percent while NZX 50 did grow. Are we sure the same analysts are this time around righter?

Just saying ... I don't know where the stock goes from here - and nobody else does either, but I certainly would not bet the farm on them going up from here, and hey - as the legend KW used to say: "Never drink and buy into a downtrend, you bl**dy idi*t". Do I need to confirm that she was usually right ?

Discl: not holding;

DYOR and do not sell or buy based just on my or anybody else's posts. They are only meant to provide some food for your own grey cells. "Do Your Own Research"

Don't see any uptrend either. However, "the trend is your friend, until the end when it bends". The question is when will it bend?


Is there any evidence that the board haven't learned from their mistakes? I'm guessing we would have to wait and see what new CEO has to offer until then it's just pure speculations. My understanding new CEO will start somewhat in February and there was no indication that he would not. Actually GB was saying that new CEO already somewhat involved.

Yes, their handling of sales channels recently was a big surprise. I would not say they do not understand it but clearly something went very wrong in the last few months.

Is ATM cheap? Is forward PE of 21 right one to estimate? I guess it depends on how one sees the company. Some see it as growth story with a temporary bump on the road others see it as failure with no much future or anything in between. Make your pick. My view is a bit more complicated but in general positive.

On the subject of when one should buy or sell for that matter my view is it's absolutely individual choice and nobody's else business. And I must confess some of my best ever investments decisions were made not in a "sober" state of mind.

[macduffy]

The first principle of science is to have sufficient replication in an experiment in order to attain significance. The second principle is to repeat all experiments several times until you are certain the result is consistent only then can you make a conclusion.

Interesting, but I've never thought of investing as a science! More like an art?

[tomm]

My research showing me , this business doesn't have depth and it is expanding and it is investing for the future and the business is rolling, doesn't matter how it is.
I believe the double bottom SP is at $10.80 and it is for A2M and it is how it is, I don't wait for the bottom neither for reverse trend , if I feel it is ridiculous cheap I will buy, and if I think it is rediculous expensive , I will sell. Simple!

[Biscuit]

Interesting, but I've never thought of investing as a science! More like an art?

Ha, yes I too think investing is an art. In science we need to rigorously test the "rules" in art it is best to discard them entirely.

[silu]

Wondering if sometimes it would be appropriate to disclose what investment time frame we expect from a holding. I expect to hold ATM for at least 5-10 years and I haven't found a company on the NZX yet where I expect that kind of EPS growth. But then I'm in the enviable position on having bought at 50c.

[Waltzing]

"The first principle of science is to have sufficient replication in an experiment in order to attain significance. The second principle is to repeat all experiments several times until you are certain the result is consistent only then can you make a conclusion."

something we do is to test the opposite. Repeating the experiment of course is great for check that your equipment is working.

often we find that not enough variations of input or range input data is not great enough to allow a conclusion.