I just spoke to an orchidist which works for Scales. They are not sending any apples to China this year as it has become too risky. Even at a premium price they get, the risk is not worth it.
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I like all the negative news flows being highlighted in the media ...they are setting the stage for capitulation ...making the SP even more attractive to a " Suitor " ...lets hope it works out that way for the sake of old shareholders still waiting for some good news out of this old horse :D
How many old shareholders that bought in below current prices are left though? I would suggest very few by now, most of the current holders would range from those bleeding from a small cut to those that are on life support, this company is as an appalling story of wealth destruction as you will ever see for a large cap.
I agree with your wealth destruction part ...but there are still many many here holding from 50 cents times ...they still making huge profits !!
If we see the long term charts of ATM then we observe it went up big in just 3 years now back to similar levels ...June 2017 SP was $ 3.25 ...so still making reasonable returns on just 4 years period . Only problem is with entrants after 2019 maybe . But it got too much euphoric attention of the markets ...while it was just a " One Trick Pony " ...China market and IF business ...still struggling to add something meaningful else
PS : Today Morningstar upgraded it to " Buy " ...lol
Now many are hoping that it will stop somewhere then turnaround returns can be phenomenal if u can get lucky ...That involves luck also and some astute calculations also ...need understand how to see value in business from all's point of view ...not just number crunching type ...as some interested parties may see value in ATM @ say $ 5 and for some its worthless @ $ 3 also . $ 1.5 B revenue with profits and well tied supply chain etc may sound good to someone in the business etc .
For me its becoming very interesting for ATM from suitor point of view ...no one is thinking of this management doing anything worthwhile to improve SP in a hurry
I think Balance makes a very good point. Paying a forward PE of 30 makes sense only when you have very high confidence in strong earnings growth . That metric made sense many years ago when the company was consistently growing very strongly year after year. It should be abundantly clear that the future for ATM is highly uncertain and the geopolitical risk has never been higher. A forward PE in the mid teens based on ~ 20 cps earnings would more correctly reflect the risk and opportunities in my opinion.
In my opinion this is a SELL and fair value is about $3.
Blackmores had similar problems with Chinese distribution and sales last year
Blackmores share recovering well …heading to $100 …..might even get to the highs of $170 odd again;)
Eventually should happen with ATM also ...depends upon your luck and patience to get those returns sooner then latter ...not easy to hold steadily going down stock ...But $ 3 should not happen and most likely wont happen . Not advising to buy ...just testing my market sense ...lol