Long history of Teeger talking the price down. Last year downgraded target from $14 to $11
https://hotcopper.com.au/threads/cit...4573982/page-7
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Long history of Teeger talking the price down. Last year downgraded target from $14 to $11
https://hotcopper.com.au/threads/cit...4573982/page-7
Maybe so but its a little bit of an inconvenient truth that they were right and it actually well and truly overshot on the low side and went well under $10 at one point last year.
Couldn't happen again...of maybe it could now the forecast growth rate in eps is just one third the rate of what it was last year :ohmy:
Chart doesn't look good. Attachment 10780 Where's the support ? $10?
hammer time today if over seas markets are any influence
Sigh....Couta1 me ol mate. Just remember when this gets smashed I tried to help, I really did... but now I am done so if you're sick of the barking you can take your ear muffs off now :p
I have to wonder that, the big boys are loading up but SP is falling.
looks like shares are being lent to shorters by big insto's given the announcements by morgan stanley , ubs
http://nzx-prod-s7fsd7f98s.s3-websit...547/308394.pdf
http://nzx-prod-s7fsd7f98s.s3-websit...546/308393.pdf
Looks like we are headed for sub $13 today, I wonder if that snippet of a comment in the financial page of the Herald has people thinking , its re BAL in Aust?
Holders of this stock are basically caught up in a Game if Thrones currently, UBS/Morgans/Citi are pulling down the SP for their own purposes and it has nothing whatsoever to do with fundamentals it's all about mopping up as many cheap shares as they can from weak hands.
Not sure how we all missed this but thanks to JBinvest from HC for posting the link re conf call following FY results this year in Aug. Almost an hour long so set some time aside and listen for those that're keen.
Beagle has laid out the bearish case very well and there is definitely been a change in the fundamentals which shouldn’t be ignored. The fundamental change is Jayne doubling down on marketing and sacrificing EPS growth for revenue growth, something very common in high growth stocks and imo not a bad thing.
The marketing team at ATM have always been praised as they’ve done an exceptional job so far, I think once again doubling their budget will pay off and it’s not like there’s a shortage of $s to push harder with a proven strategy. I don’t think all the low hanging fruit has been picked or that sales growth will drop off as fast as some believe. I suspect Jayne’s wording was used to lower the market expectations as things were getting a bit stupid at $18 but 10% market share is very much on the cards over the next 5 years.
I bought back the all the shares that I sold at $17.94 + some at the close yesterday, catching the falling knife when the RSI hits 30 has worked very well for me in the past with this stock.
Market will do what the market does - we are but minnows against the big boys in the short term when it comes to them influencing the sp.
But what we can do is manage our own emotions and reactions to the price movements and fluctuations.
Being a high PER stock, ATM is unquestionably also a high risk stock - it cannot fail to deliver on the high expectations built into the sp.
We have seen what happens when it misses expectations by just a bit in the last results - it is called PER contraction.
W69 and I have always talk about downgrades coming in threes - hope ATM is an exception rather than the norm.
Meanwhile, pays to keep safe by not being over-exposed.
Just finished listening to earnings conf call. For a start, it was done very professionally and articulated well both by Jayne and Craig (CF0) and Peter Nathan.
Only first 10 or 15 min was re numbers and other bits and pieces relating to FY results and remainder was all Q&As from Analysts. Very informative and clears all short term noise from various online posters on different forums. The way I see it is that couple of Instos (like UBS) and shorters miking it in the short term on perceived weakness of fundamentals, which is not case at all once you listen to whole transcript.
In summary, if you're in for long term nothing to fear about day to day price movements. They've very clear strategy ahead and are investing accordingly to execute that both in China and USA.
Will try and attend ASM in Nov as its being held in Akl this year.
Thanks for the update sb9. Much appreciated.
For the benefit of someone who asked me on the Plexure thread about how the shorts are doing - ‘are they burning?’ - here’s my view as articulated since I sold 2/3 of my shares when ATM reported.
The story on ATM is still a great one but the risk profile on the company has changed - it’s now in a higher risk category necessitating a more cautious investment approach imo.
Downgrades come in 3s and ATM has just had one, albeit a small one in the last results. Hence, the PE contraction from the high 30s.
The need to ramp up marketing and promotional spend to maintain sales momentum with associated lower margins - easy gains are indeed behind the company and it’s going to get harder from here.
The US expansion and associated losses to date is a worry for some of us as the US is no cake walk as many NZ companies have found.
Overall, the shorts are still out of the money but those shorting recently at the higher prices are obviously not burning.
UBS Group AG and its related bodies corporate have been quite active in ATM lately. Their announcements aren't also easy to follow but I gather that they've been over and under the 5% SSH threshold and now they've gone over again.
They must be making money shorting and buying back on the cheap ?
Its all about game playing and mopping up as many cheap shares as possible right now plus collecting shorting fees, I dont see PE contraction as a reason for the fall, just wait until these players take their pedal of the gas or a bigger player starts buying and watch what happens to the SP not to mention any good announcements which may come out. PS-Theres also a takeover possibility but I highly doubt it would be successful.
I think this aspect of the SP drop is often overlooked. The likes of me who recently went all in at $15.10 (after a very good week trading in and out of the stock - decided to hold over the weekend before the SP started it's merry tumble - nice move... *face palm*), have to sit out this raid on lower prices by the big guns. I'm sure as hell not getting whacked with a huge loss to satisfy their games. As you say, eventually the foot will come off the pedal and give the SP a chance to come out from under this downward pressure. Of course, a bit of positive news from TPTB @ A2 would help give the SP a decent spike (not to say the news hasn't been positive, IMO).
https://www.youtube.com/watch?v=EGlGhrbYuxo
Interview on Bloomberg with the CEO.
Another good interview, I like this one because you can see how Jayne's approach to growth is a lot more ambitious to a more conservative Geoffrey. When Jayne was asked when the business will become break-even in the US she was clear that the number one agenda is to grow the brand and market share first, she said she has no plans to cut back on marketing to become profitable sooner. This is very different to Geoffrey's more conservative approach of becoming profitable in the US quickly, and having the sales contribute to EPS which Jayne obviously doesn't agree is the best way to maximise shareholders long term earnings potential.
I like Jayne's courage here and suspect the board is in agreement with her, grow sales and worry about EPS later. The market wants to continue using the PE ratio to value this business and give it a lower multiple due to slower EPS growth but in my view as long as sales growth continues at a fast clip if anything it deserves a higher multiple as earnings are put on the back-burner.
By all metrics I can't see and evidence of growth slumping much, the commerce data from Goldman, port data and sales results direct from the company are all still showing excellent growth. If and when sales growth really starts to slow then a think it's fair to punish the share with a lower multiple.
F19 Half 613M PCP = 41%
F19 Second half 687M = PCP 40.7%
F19 full 1300M = PCP 40.8%
US second half revenue growth = 200%.
Good luck all holders, the business has a long road ahead.
allfrom, bit harsh on Geoffery as he didn't have the luxury of the cash in the bank that she now has, he was more interested in growing the brand in China and Aust which laid the ground for her to be able to spend on what she wants to grow the brand in her way, I do hope that she gets that right !
I have some and are starting to add .Risky but good share.
Breast is best + much better emotional bonding. A2M infant formula, second best.
Holding a small parcel myself, but we still should stay to the facts.
There is a certain percentage of the population (from memory I think up to 45% in the Asian population and something like 15% in the Caucasian population - the numbers sort of move depending on who paid for the relevant article, and authors often mix up A1 intolerance and lactose intolerance) who have problems to digest A1 milk.
For anybody with A1 intolerance A2-milk is "better" though obviously breast milk would be best for infants (which would be A2 as well). Obviously - there are a number of other sources of A2-milk: goat milk, sheep-milk and there are as well some other specialty cow milk suppliers (unrelated to the A2 company) offering A2-milk. All good.
For anybody without A1 intolerance it does not matter at all, whether they buy A2 or drink instead the cheaper A1 milk (or more likely the typical A1/A2-mix) . Pure A2 milk just helps them to relieve their wallets, which may or may not be seen as beneficial by the consumer ;);
Shows you how stuffed in the head many people are, considering all the evidence of emotional bonding and the nurturing that leads to far better outcomes.
Herdlicka's experiment with gargantuan sized marketing has got no better than a 50/50 chance of success in my opinion. This isn't the slam dunk winner many think it is and reality bites, has actually lost $1.50 in value in the last 19 months. Maybe the game has changed and all the low hanging fruit has gone...
They're not forecast to maintain it despite the dramatic increase in spend.
Based on average analyst expectations, despite the gargantuan increase in marketing, sales growth is forecast to slow considerably from FY19 and dramatically from the rate achieved in FY18. The slowing in EPS growth is even more dramatic with only mid teens (percent per annum) forecast for FY20.
Despite the obvious slowing the PE has not contracted to more realistic level's. I think this grinds lower as the reality of much lower growth rates slowly becomes more widely understood. The reality is once the low hanging fruit is all gone its much slower and more expensive to grow further from there.
Due to daylight savings kicked in here, we've an extra hour to negotiate before being influenced by ASX which starts at 1pm our time. Its only for this week, from next week business as usual.
Just another bit on that marketing expense so we don't worry about it? https://www.nutraingredients-asia.co...JD-partnership
That's good isn't it.
Well, we're into last quarter for this CY. Let's see what it might bring.
Don't wanna jinx it, but haven't seen the CEO share sale happen yet, which I tht would've been done post strategic presentation in China. May be she has decided to hold onto them bit longer until 4M update at ASM time in Nov.
Wow, 2 up days in a row. Are we there yet? Is this the start of the next........:t_up:
I'm sure there is a thread somewhere about buying in a downtrend......
Wasn't it someone's little tagline that said "Never drink and buy in a downtrend"??
a
Yes, and last year about Oct. it went down to 8.67 but was only there for about 10 sec. By end of day it was well over $9. My buy ins last Oct....3/10/18 to 1/11/18.....11.26, 10.78, 9.71, 9.72, 9.80 and 10.69. it moved so fast from 8.67 back to the mid 9s within a few hours, just couldn't catch it. See where it gets to this year:).
Does anyone find it unusual that we’ve still haven't had our regular senior management share sell off yet? I notice the chief of marketing exercising 200K options perhaps getting ready to sell them as she usually does. One might speculate we’re the cusp of a big announcement or maybe management see the current price as grossly undervalued and prefer to wait for a better price after the next market update in November.
Holding exceptionally well, looks as though $13 or there about is the floor.
Right now out of the 100 stocks on the ASX100 only 6 are in the green - A2 being one of them. Perhaps it really has hit its bottom lets not count my chickens too soon!
https://www.marketindex.com.au/asx100
Why the ongoing weakness !!
Not as bad as last year. It closed at 9.04 on 11/10/18. The next day 12/10/18 it went down to its year low of 8.67, but by days end it was up to 9.89 at close, a gain of 85c from day before. Then it started the long slow up trend to $18 over 9.5 months. Who knows what low for this year, but good buying while it lasts;).ps about a dollar a month over 9.5 months:).
No...Goat milk is the next big thing mate. I barked it first :p https://www.globalhealingcenter.com/...milk-benefits/
Considering ATM my thoughts are....if anyone is interested.
a) The market will be concerned about the status of one of their key suppliers...Synlait.
b) Really....how valid is the A2 protein science ?
c) If it is totally valid...how long before all dairy herds are A2 ?
That's what keeps me from investing. Oh...and I don't like the dividend structure.
The 50/200 DMA 'death cross' is inevitable, it's too late to reverse. That said, last time the death cross occurred the SP was rising out of $8.67 and look where it got too. It's likely that the cross this time, when it happens, in a solid down trend from ATH will trigger various TA inspired responses.
I see fair value at $11.50 but before dipping my snout in for a drink I'd also want to see TA looking a lot healthier than it does at this point :eek2:
Could be party time if it gets down to $9 and a right old free for all :) https://www.youtube.com/watch?v=lnJ6t-PKLWE
Have you done a valuation to arrive at $11.50 "fair value"? My FA's not good enough to contrive such a low SP number for this high growth company.
In any event, if it's the TA that keeps you out, you'd need the price to fall well below $11.50 and then rise above say the 100MA before the TA looked good enough to buy. Conundrum is even though it was below your fair value, you still wouldn't buy it because the TA was bad.
Yes I have and you are right, it would need to fall below $11.50 and then build a base and start to recover before TA looked any good.
$11.50 not so outrageous really. https://www.marketscreener.com/A2-MI...022/consensus/
One of the analysts has a 12 month price target of just $11.85 which suggests (using a 12% expected rate of return on risk capital), a fair value of just $10.43 at present.
Using the same discounting methodology to the average 12 month price forecast of N.Z. $14.86 (x 0.88) gives $$13.07 as fair value today.
Recent price trading range suggests the current price is about fair value according to average analyst view. Some analysts believe their EDITDA margin will not recover in FY21, FY22 or anytime soon thereafter, (due to ongoing rampant marketing and human resources cost increases) so some DCF valuations are far too optimistic.
Sales rising to $2.3b by 2022 will be a very tough ask too, in my opinion. Lot of growth already well and truly fully priced into this one already.
Well to keep some balance, one analyst reckons $17.50 and the average analysts target which you quote fairly often for other shares is $14.86. Cherry picking the outlier at $11.85 and building a case around that is dubious. So, have you done your own analysis to arrive at $11.85 and an outrageous $9 in a previous post?
Couta's right, you'd have hell fire and brimstone raining upon you and your credibility would be shot to pieces if you posted this stuff on another well known discussion that is passionate about ATM/A2M. Are you doing it just to wind up your mate, like teasing without a LOL?
LOL - Yes I have worked my own analysis to arrive at $11.50 as fair value today. $9 talk is just party time for Beagle buying, probably won't get there but it did last year :eek2: (Ducks for cover under a big pile of flak jackets) :D
Do you think it slightly incongruous that KFL haven't changed (or sold) their position in ATM even although the SP has dropped from NZ$18 to $13? I thought they were more onto it than that, holding such a losing position. Maybe they still believe their own forecasts?
"Why do we own it?
The a2 Milk Company has a small but fast growing share of the very lucrative Chinese infant formula market. Management have capably executed on its growth plans to date and we expect its market share to continue growing across a range of distribution channels. In addition, there is potential for further upside from new products and geographies."
Personally, I think $11.85 would require a world war III event and at $9 I'd re mortgage the house to buy the truckload I wish I had. Can't say it won't happen with all the geo political nonsense going on and GFCII deferred until who knows when, but on a 'valuation basis' ... yeah nah.
Talk of $10 shares are fun and I guess dreams are free but with just 6 weeks until the next trading update I can't see this falling much further.
Companies (listed) are tuned to growth in revenues and/or profits so are extremely reluctant when circumstances change to downgrade, until they really have no option but to downgrade.
All too often when faced with this likelihood, hope still reigns supreme and companies (or rather the management & directors) like to believe they can turnaround the ‘’temporary’ reversal of fortunes - so they only downgrade by as little as they can get away with.
Then, comes the results and reality. So companies are forced to downgrade further but still, by only what they think will be sufficient rather than what is required.
And so on and so forth.
been consolidating between 12.90 - 13.40 last week odd so by my calc's a breakdown would imply a move to 12.40
KFL's position in ATM is not one I agree with and I am disappointed with their approach of adding too it and furthermore I am not especially comfortable with their approach of having 60% of the fund in their top 5 stocks. Its a very, very aggressive position for a fund manager to take and when it goes wrong, they dramatically underperform the market like they did in August 2019 and probably in Sept as well, (Sept monthly report yet to be published). I have revised my position in KFL a little while back, accordingly.
I posted some of my thoughts on the merits between the different investment vehicles in the Kingfish group in post #649 here. https://www.sharetrader.co.nz/showth...ght=Barramundi
Barramundi has a considerably more diversified portfolio, trades at a much higher discount to NTA and invests in a market trading on a forward PE that's quite considerably lower than the NZX. I don't buy individual stocks on the ASX so Barramundi adds considerable diversification to my portfolio.
In terms of KFL now, by and large I am happiest to pick my own stocks on the NZX with whatever weighting I feel is appropriate.
ATM has been a wonderful growth stock under Geoffrey Babbage's leadership. Jayne Herlicka's approach of throwing vast amounts of resource at marketing and human resources to enjoy much slower eps growth is an "interesting" approach and not one I agree with.
Relentless !