A2M was experiment with shortage of supply toward demand. This is the best time to buy and best option of all. They got 92% increased in the US alone and going forward, this is the magic of best CEO and BOARD.
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I cannot see it being of much benefit to Southland without more milk supply and the public in their wisdom have decided farmers are not allowed to do that.
Re electricity vs coal, I saw something from Fonterra that said electricity would be several times the cost of coal
Watch this space $19.50/share is going to be history.
Fonterra has clearly indicated that their strategy going forward is to use biomass / woodchips to power their dryers etc in the South Island
eg https://www.stuff.co.nz/environment/...p-in-september
https://businessdesk.co.nz/article/f...sion-reduction (Paywalled)
https://www.newshub.co.nz/home/new-z...iott-dies.html
Sorry if posted earlier, but
What a man!!!
A different take on the 2018 marketing/partnership agreement between Fonterra and ATM by Keith Woodford shows just how smart ATM is/was. See full blog here.
"Fonterra fought the concept of A2 milk from the outset nearly 20 years ago. Fonterra saw A2 as a risk rather than an opportunity. Then, in a remarkable turnaround, Fonterra announced in February 2018 that they were forming a partnership with The a2 Milk Company (A2M) primarily to supply ingredients. At the time, it seemed an exciting move. But alas, Fonterra messed-up badly with that agreement. It effectively meant that Fonterra could not sell A2 ingredients to anyone apart from A2M unless A2M agreed. And as I found out when asked to assist an overseas company in obtaining such products, A2M was never going to agree to that.
So, what that agreement achieved was to effectively take A2M’s potentially biggest competitor out of the market. Most of the big international dairy companies are now putting together A2 dairy offerings but none can purchase those A2 ingredients from Fonterra. Fonterra could still be the global leader in A2 ingredients, sold through long-term supply contracts. But it cannot happen until the current agreement between Fonterra and A2M runs its course.
Ironically, the biggest New Zealand value-add dairy company is The a2 Milk Company itself (coded A2M on the ASX and ATM on the NZX). Although the Head Office is in Auckland, all of the key executives are in Australia, China and the USA, with the Chair based in the UK. Most of the shares are also held by investors outside New Zealand. (For those wanting further information on this company and its journey, I have been writing about it for more than 15 years, with many of those articles at my own site here .)A2M continues its journey of exponential growth, with a further increase of over 30 percent in annual profit recently announced. The company is now valued at around $NZ15 billion, well over twice that of Fonterra."
Impressive and v cunning!
Good to see the SP settling down above $NZ20.00 after the recent results and announcement re Mataura Valley.
Macquarrie have now upgraded their analysis of ATM to 'outperform' targeting a SP of $A21.25 ($NZ 23)
...and this from an article in the AFN.
"Analysts are tipping a2 milk’s potential acquisition of a majority stake in NZ based Mataura Valley milk as a move that could allow the dairy giant to better manage an increasingly complicated relationship with China while growing margins.
Macquarie also touched on geopolitical tensions as a risk factor, but were confident that the infant formula market would remain excluded from tit-for-tat trade wars as China is not yet self-sufficient in its production....... (saying) " infant formula has been more immune to challenges given the essential nature and sensitive consumer base (compared to luxury goods as an example),” they wrote in a note.“We hence think this, and lack of China self-sufficiency for infant formula is somewhat prohibitive of large infant formula producers and brands being tied up in political tensions.”....
....Macquarie analysts said that the purchase and creation of a new facility will reach break-even point “relatively quickly,” with the facility to produce a return on capital employed in excess of 20 per cent."
All this pretty obvious IMHO, but nice to have it confirmed by pointy heads.
A few c from me... I have personally walked around the MVM plant and spoken to senior stuff (other business matters, not to disc)
Other than the coal fired boiler it is one of the most advanced facilities of its kind, runs on a skeleton crew and highly automated. It currently is set up to manufacture IF base powder + commodities, it is potentially likely in the short term may supply Synlait for wet blend and canning.
The farmer suppliers are passionate and operate with one of the most stringent farm assurance program in the sector, they have a line out the door of farmers who want to supply and have been very choosey so far.
The purchase arrangement is curious to me....
"The transaction, which is subject to a period of exclusive due diligence, would involve A2 Milk acquiring 75.1% of Mataura Valley Milk for approximately $270m, with the bulk of the money used to pay down Mataura Valley’s debt.
As of December 2019, Mataura Valley had debt of $240m and was in breach of its banking covenants.
Babidge said under the proposed transaction, only about 10–15% of the debt would remain on Mataura Valley’s balance sheet"
With most of it to pay down debt (I believe its via shareholder loan to the Chinese parent + banks) that's not alot of equity currently existing with the business, my read is existing MVM shareholders are talking a bath on the investment, esp considering my comments on the plant above.
The real benefit for a2 is locking up what would be a large A2 source coming to the market (c.f. points made by Keith W on the Fonterra deal), my understanding was that the suppliers were already a long way in transitioning the herds to exclusive A2 milk
Thanks for your thoughts kiwi$.
Just noticed this news out of Aussie, which is good news for ATM.
$600m deal for China's Mengniu to buy Lion Dairy called off amid trade tensions
See it here.
https://www.youtube.com/watch?v=_2MfX7LPXVU
Obviously he is a dodgy economist, but he raises the valid point that as we go into negitive interest rates, and countries like AU/US refuse to, it would result in a significant devaluation of the NZD (he claims to about .5 USD).
Significant tailwind for A2?
It is obvious that A2M doesn't give out dividend and the insto's put too much money to invest in it, the only way they can make money is as we use to see on this stock.
1)The Sp price will be pushed up as high as it suppose to be before the announcement.
2) Pushing the Sp down and shaking the tree to collect as much as they can for the next phase right after the announcement.
Its a game for LTH.
Attachment 11889
Aussies shorting increasing
Another useful graph showing monthly showing which months the share prices go down.
https://www.shortman.com.au/seasonality?q=A2M
Nothing but positives to be taken from this move. Far better use of 270M than leaving it in the bank at 1%. Indicates ever-increasing demand as they need another manufacturing plant to keep up.
Maybe with such demand we'll see an A2 owned and branded ship running between NZ and China - or even better - a Fleet of them!! :t_up: :t_up: :t_up:
Mouth watering pay day for Senior execs and Chair. Big windfalls for Peter and Susan, wow!
The fact is I am upset because I missed the opportunity to top up when this news came out due to NZX is crashed yesterday.
I'm actually finding the current situation quite refreshing whilst being on holiday, apart from the fact that the stock is getting wasted and my current avg price is well north of $20 so I wouldnt be doing any trading anyway, it's nice to pause and take a break and not feel rattled at all by the price drop. Re your top up comment, the price is so ridiculously cheap based on its latest result and growth potential it doesnt really matter when one tops up.
Wow 19.21 open!
It is still getting a hammering today. Feel sorry for those that can't sell their shares if they needed the money. Not only in A2 but with all other shares
Broken down through the 100 day moving average today. Some caution warranted I feel. Listening to Geoff the other day I got the sense that the pantry stocking that went on has rolled off a bit and Q1 FY21 is not going to be that crash hot.
As always, a balanced and very well diversified portfolio of quality companies gives the optimum risk and reward portfolio structure.
LOL, yes, that comment completely dispels any notion you were taking a dig at couta, who I thought was buried deep in HLG, or was it snow...I can't recall, it's Friday, need beer.
Anyway, I'm on the board now with some ATM...happy to get in below $20, hopefully not too late to the party. Could be some averaging down coming in the weeks ahead, we'll see.
You're not wrong. I've been reading the Devil in the Milk, Keith Woodford's book about A1 and A2 milk. I'm certainly steering clear of regular milk and wouldn't consider giving it to my children, and the evidence is only getting stronger. It's nice to have an investment that can make you money as well as saving lives.
Another little top up for me today.
This is looking like good value at these levels. Big fan and happy to hold.
This will tell you everything
Attachment 11897
Confident to top up .
I am seeing a gap of about 3.5% wide. What are you seeing Tom?
big jump in NZD overnight , not good for a2
I am sure they have the dollar hedged like most exporters.
A2's millionaires still dumping stock
Aug 27, 2020 – 5.49pm
Kiwi milk company (and ASX darling) A2 is near its historic highs, and you better believe a swag of insiders are locking in their paper gains
https://www.afr.com/rear-window/a2-s-millionaires-still-dumping-stock-20200827-p55pzn
normally signs of a top if heaps of insiders selling
You have it in for this stock. Knock Knock just like some others that you comment on ST. Have to say your constant knocking on this one is not working, well not for me anyway. Keep playing your games..
There could be for Mad Bull Disease..
Maybe a Greek Style servicing is what the Dr ordered.
That should smash a few plates...
And tenderise his stake.
Sacre Bleu...Off to enjoy the Spoils of being invested in A2 for 10 years. Cheers and Look forward to the next 10 years!!
Off to enjoy the Spoils of being invested in A2 for 10 years"
makes me feel unwell.. wont say what we sold out at, reminds me of FPH and Zero. We have a good reason to sell and none of those good reasons come over the horizon. In the case of zero we said they are out of cash, 2 weeks later a US injection of a lot of money arrived. Never sell a good story unless the storms actually looks like it will hit tomorrow..wait and hold... w
well dont that man.
I say hold to your conviction, the rest as they say is drama lama.. Bull enjoy your down ramping....Those that have DYOR will be fine..
hammer time , directors etc selling is usually good for a short term trade
Go for it Bull....good luck to you!
... and if your many short term trade gains on ATM can beat this 8000% plus long term tax free buy and hold gains I'll shout you a beer.
Attachment 11906
This is how much the shorters are growing since the announcement. Nothing to do with the A2M business itself .
https://www.shortman.com.au/stock?q=a2m
When Bull starts talking about hammers it's usually a good time to buy
USA continues to be a strategically important market‒
Largest global milk market with significant and growing premium segment‒
Significant growth in awareness will create a platform for future product innovation‒
Initial milestone continues to be US$100 million of annualised sales
• Launched in Canada via a licensing agreement with Agrifoods in July FY21
Capital allocation frameworkAs we noted in February 2020, as part of the Board’s ongoing review of the most appropriate use of capitalfor the business, we continue to prioritise investment in growth initiatives ahead of returning capital toshareholders.As we have announced previously, due to the increasing scale of our infant nutrition business, we considerit now appropriate to assess participation in manufacturing capacity and capability to complement ourexisting supply chain relationships. Accordingly, we are presently evaluating opportunities to address thisissue, with significant progress made during the year.With our cash balance growing it has become increasingly important for the business to review our capitalrequirements going forward. A significant review of our capital allocation framework was commenced inthe second half with a view to defining the discipline and prioritisation of our financial parameters in a waythat optimises and supports our long-term plan.
looks like shorts are winning again today . yaha probably to do with all the negatives at the moment
directors selling
nzd up
china may ban them if nz upsets them
bubs says diagou trade not good at the moment
destocking occurring in households
probably all short term stuff eh
Perfect for you to play your short game Bull
And there are one or two of those around..
RSI is clearly stated oversold. Will bounce back.
............Edited. Gone back to my kennel.
And don't forget the amazing returns for anybody who manages to buy a winning lotto ticket ...
$1 today. $1 million tomorrow. That's an annualised return of ~ 40000000000% without the need to reinvest your gains. Obviously - has nothing to do with investment and neither has bitcoin.
NZ markets always positive. As soon as Australian market opens, it plummets. Bring on November
Looks like the slide may have abated and it finished positive on the ASX. I guess the remainder of the week will be telling. Scooped up a few more today in the $18.20s and have a bid in south of that, but remains to be seen if it gets filled.
Just read a post over on HC about someone combining skiing, Canterbury Cream and A2 milk...it's forced me to pour a Baileys when I should be off to bed...thanks Couta ;)
Dow Down -807.77 points yesterday, ........expect....the unexpected...
A2 has a life of its own. Have been following a2 for a bit over 6 years. But a lot more over the last 2 years. If you look at the 2 year chart, for some reason sp goes down in August to Nov. Then starts heading back up through to August the next year. The low for the year was $12.19c on 7/11/19 then it reached its height of $21.74c on 18/8/20. A $9.55c gain in a 9 month period. Maybe a low of $16 to $18 this year, who knows? A2 was 100% of my port folio earlier this year but is now only 38%. Dividend chasing at the moment.;)
short going good could be more if markets keep tanking