Did they give a range/numbers
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Just a general statement about downgrades coming in threes from me, couta1.
A2 has been heck of a great investment for many of us, including me and I am not knocking its business - more the general psychology around why management & directors persist with multiple downgrades.
The original guidance was for "strong growth". No specific numbers were given. There was then some insider party selling.
I posted average analyst forecasted growth and the revised mid point of the new sales projections earlier today. Summary - At the mid point of the new official company forecast sales are projected to grow less than 7%. (I will leave others to decide if that meets the definition of "strong growth") On average before today's update analysts were projecting sales growth of 18% on 31% EBITDA margin.
Disc: No position in this one. I post because I enjoy a good debate and enjoy sharing a view that is often different to the consensus. Its never intended as or should be relied upon as advice and everyone is responsible for their own decision making.
Interesting times. I jumped out a couple of weeks ago for what amounted to about a 4% loss for a couple of reasons, 1 being some of the talk around here got me a little nervous, 2 I needed to free up some cash for something and 3, with the cyclical nature of the ATM SP at this time of the year, coupled with that aforementioned nervousness, I figured I could probably jump back in later at about the same price or less. However, sitting on the sidelines at this point, it's certainly not confidence inspiring when you look at recent results, announcements, H1 and H2 projections and this all coupled with the immaculate timing of recent directors sell downs. One can't help but think that today's announcement couldn't have been timed any differently given the directors sales activity while at the same time be forward looking enough to still be able to paint a rosy picture and then blame the crystal ball in the event H2 doesn't deliver on that 47% uplift (Wow, covid clearly isn't going to be a factor for that half then).
Of course it could all be a ploy to get the weak hands to let go, of which I'm one. Yeah, nah, I'll sit tight with a Tui in hand and re-access a bit later down the track for a possible reentry point. Meanwhile, I'm expecting this downgrade and dodgy feel about it all will accentuate the usual seasonal slide.
Oh dear another raid!! ........ Could be ANOTHER burn date coming shortly for the borrowed share boys if a2 starts running low on weak hands.
imagine if a2 doesnt make its optimistic 2nd half outlook be amegedon on the share price
Based on simple facts mate. Mid point of annual sales forecast over mid point of sales of IH shows the company is projecting sales of $1,100m for 2H compared to $750m for H1 so sales are forecasted 1100/750 = 46.67% higher in 2H than what they doing in this half. (Note I made it clear from the outset that the 47% growth forecasted in 2H is based on 1H sales, not what they did in 2H in FY20).
No creative license, creative accounting or mischievousness whatsoever in that...all based on the forecasted figures the company itself provided.
Don't blame me if your abacus isn't working properly :p
OK if not mischievous just misleading
H2 sales are always more than H1 sales so your logic is rather like some of what politicians use - full of crap and very creative etc etc etc
Based on forecasted figures the highest H2 sales are likely to be are 1175m (H1 725m and high FY 1900m) which would be 27% more than H2 20
Your 47% is (don't know what word to put in here)
Taking your favourite midpoint approach H1 would be down 7% on last year and H2 would be up 19% - now be fair and say this is a more realistic view of reality than your scaremongering 47%
So I'm misleading, full of crap, mischievous if not misleading, very creative etc etc etc and more adjectives you can't find as well as deliberately scaremongering.
I reckon, (won't stoop to name calling and accusatory adjectives like some people) :p you're confused about 1H-2H split from previous years because you've failed to consider that 2H has traditionally been a lot stronger because of the previous years ongoing sales growth throughout the years....but hey...what would I know as a beancounter for nearly 40 years...this is all new to me right :p
What if sales growth is really modest compared to 1H FY21 in 2H...ouch I better not pose that question otherwise I might get accused of scaremongering again.
Couldn't possibly happen if the Covid crisis rolls on...not possible :rolleyes:
I think you better go and scape the rust off your abacus mate.
49m shares shorted as at last update.
Guess there’s some short coverings today to lock in gains.
Be fascinating after the analysts have had a chat with the company, what updated numbers and recommendations they will be coming out with in the next few days given the sp is already way down on its peak in August.
Created another big gap for uptrend. I am happy :)
Came through as a video update, sept 25, Share Advisor.
Numbers today NZ 2.1m Aus currently 10m looks like a slow grind ...........All three USA indexes showing green
One of the stubborn ones that is still holding onto their shares. $14 prediction today pftttt. I remember hopping into a company named sirtex. I sold after a downgrade at $12......... Silly me, 6 weeks later they had a takeaway offer for $30+. I would not be surprised to see this happening with ATM at some stage. Only a prediction not fact.
Stubborn is the right trait to have when faced with these situations, I've been shaken out of big holdings before and lost big coin,once things reversed the sp has ended up well north of my sell price given time. I hung tight with BAL as I could see there was a good chance of a takeover and was glad I did, apply these thoughts to A2 to make the correct decision.
Thinks of A2 recently three-year sp movement pattern ( down during Q1, then slowly up during Q2, Q3), that could be caused by consumer behaviour.
Q1 in China is summer, most of areas are over 40 degree, super hot. Two reasons that they may buy less dairy products during this season.
- Babies drink less warm milk than other season. Human nature, just too hot.
- Chinese parents worry about of the storage of infant milk powder under high temperature, that may have negative impact on the quality of milk products. This has not been approved by scientists though.
- Sales always surge from the mid of Oct.
The facts are confirmed by two Daigou Shops, the sales of health supplementary products also show the same seasonal pattern.
I dunno what the big panic is. It's still a solid company with future growths.
Think today just proves how scared everyone gets when they look for the market reaction rather than the simple straightforward announcement for the company they have invested in.
The market never plays ball so why get your panties in a twist. Even if A2 is a slow-growth company it's still a growth company with much more areas to expand in the future.
You can criticise those who choose to stand on the sidelines and wait for inevitable price weakness, which ATM has consistently offered?
Or wait and buy that weakness. The market is dynamic, it has no Emotion, we can only choose when we buy or sell. Whether we do or not doesn’t define us.
NO.... (11/11) 11th Nov is Alibaba's $38 Billion Dollar 24hr Singles Shopping Extravaganza ............as 12/12
https://news.cgtn.com/news/2019-11-1...AU8/index.html
Down more than 20% from the peak but is that enough given the quite significant change in outlook ?
Sure will be mate. What's the bet there's a few analysts with some questions of how in August 2020 the talk was of strong growth, then directors sell and now in Sept 2020 they're talking weak growth. What's the next update, no growth ?
Is what we are seeing a repeat of factors playing out similar to last year ?
Aug through Nov 2019 saw a retreat
Any guesses on the 'bottom' given modified 2020 economic factors present now ? ;)
Absolutely correct. This is a long term growth stock, not a short term trading stock. Anyone buying it for the latter will inevitably get their fingers burnt. While the SP will likely continue to drift off until the value proposition returns, this is still one of the best companies on the NZX for future returns. Take a look at the SP chart over the last 2 years - 2018 hit $14, fell 36% to $9. Then 100% gain to $18 in 2019 before 32% fall to $12.25. Then 76% gain to $21.50 before current retreat. Each of these retreats presents a great buying opportunity to top up and ride the next wave up. If you are a long term holder (as I am - average buy in $5.30) these dips are just great. So many commentators on this forum getting their knickers in a twist over some short term (and I mean 12 months - see the SP charts) weakness. Hold and add to your holding if you believe in this company and don't try to time your exit and re-entry points - you will inevitably be too late to jump back in when the better news comes out. If you like technical analysis wait for the shorter end trends to stabilise and begin to firm - that may yet be some time away. The bottom line is these lower SP levels are eventual buying opportunities. Where else in this market can you find relatively easy potential 30% upside in a blue chip company ? Greedy traders might look for those returns over a shorter time horizon, but how many are actually successful ? With a 187% return over 3 years at today's SP, I will biding my time until the signals look good, and will be topping up my holding. Nothing better than making the same money twice on the same price rise as previously, with a greater share holding. instead of agonising over what is now past history, start looking forward to the opportunities ahead, and recognise them when they present themselves....
Thank you for your excellent post, as you have correctly highlighted this stock has previously had annual falls from it's highs of up to 36%, this fact seems to be too hard for the knockers/trolls and down rampers to grasp. PS-36% off the latest high equals $13.91.
The stock is a cornerstone large long-term holding with a very low average cost of five dollars. The question to be asked I think ,is this a structural issue or not? I believe it’s not and have brought more.
I can't help, but somehow it feels you are ways too much emotionally involved in this stock, which does seem to impact on the manners. Too many eggs in just one basket? Personally I try to avoid these situations by diversification, but if your doctor says that high blood pressure is good for you, then don't change anything ;):
People who are stating that the SP is (currently) in the doldrums and might go lower are just stating the obvious - they are neither downrampers nor trolls. People who noticed this annual share price pattern which may or may not repeat this year don't need to be greedy traders - maybe they are just clever investors? Of course - the pattern might change, and in this case they missed a chance and need to pick another one. Benefit of hindsight - as always - will clear it up.
I can see good reasons for holding this stock as well as for selling high and buying back in low. Different strategies, and sometimes one and sometimes the other turns out to be more successful. No need to loose ones countenance.
From a personal perspective - I would not have bought at recent highs, but if it drops a bit more I might be tempted. However - I don't see ATM (from here) as a safe bet to becoming rich - even if it might have worked that way in the past ... but this is the thing about past performance not guaranteeing future performance. They might well keep growing as they did in the past (though there are some laws of nature making fast movements more difficult if you are big ...) or they might get caught in one of Trumpets trade wars. Who knows?
Actually this thread is still pretty good compared to the A2m thread over on hotcopper, every Troll in creation has come out if the woodwork over there, you need a double barreled Trollgun to make any progress.
I love reading this thread, learning so much. Cheers guys
Likewise have been learning heaps and enjoy the banter back and forth.
Hey Couta. You sound like my twin ! 59yrs and BP of 118/75. I don't lose any sleep holding quality, with some good yielders in there to keep the bank account topped up. My big winner has been XRO with initial average buy in after participating in SPP's of $1.81. Keep up the good work :)
i dont think a2 will meet there full year forecasts , the daigou trade is of less relevance going forward and is unlikely to bounce back anytime soon and it now accepted as fact hence undergoing structural decline increased by covid trends. the surprising bit is daigou is large part of there business from au/nz so this might take time to replace.
digital is the future selling both online and social. a2 is addressing this with there increased store print in china and social events as well but will face increased competition from within china now thanks to the big push by locals.
hammertime lol might have to have a milk bath tonight
LOL it doesn't take much to analyze a repeating pattern, same pattern for the 3rd year in a row but less drop from its high so far, good for you for your gain but don't pretend that you know its going to drop further this time cause you have no idea with any certainty.
One iron in the fire going a bit cold does not affect the diversified investor. My PPH and XRO are looking pretty good right now, not to mention my HLG I bought last week at $4.65. As I said, once the value proposition returns, top up and ride ATM back up again. I'll remind you when the time comes......
Nowhere near my purchase price and will continue to hold and if I feel they are looking way too cheap, I will buy more. ATM again are my 5 year hold and reward scheme. Also, I am well diversified and all other shares are heading up or paying dividends and holding their price.
You are well positioned GG. Hang in there. Bailing out at the first sign of weakness seldom works out well, because you either mis-time your re-entry, or don't have the capital available at the right moment - especially if it's been sunk into some other stock you were confident about which hasn't panned out the way you wanted it to. The cream rises to the surface eventually.......
Chart says it is deep oversold and will rebound, Victoria in Australia is coming out of lockdown from Monday. The profit is still up for the year 2021.
My assumption is GB is setting up an easy start ride for new CEO and ATM's future. The panic and stresses caused people's mentality as ever from every aspects of life's to make right/wrong choices atm which might cause people into a mentally thinking of being on the safe side when uncertainty news come out. Unfortunately, such news can also create opportunities for shorters and insto's to harvest. We shall see the balance in due time.
Also waiting for the Covid-19 vaccine come out in due course.
FWIW ... just looked at the chart (haven't done that for a couple of days) and noticed that the current SP dropped ways below the MA400.
Now this could mean the beginning of a serious downturn, or it might offer a buying opportunity. Given that in previous years the dip below the MA400 signalled buying opportunities I just dipped my toes into the water.
Obviously - it well might drop further, but somehow I think that long term a buy in price around $14 65 will be o.k-ish - well, better than money in the bank ;).
Well said, Peter.
I sold out of ATM earlier in the year, due to the April price surge being way OTT, and likely (as I saw it) a result of the 'Sharesies/RobinHooders' crowd piling into all the popular stocks.
Now buying back in again, as this sell-off seems an over-reaction to the daigou update from the company, which is hardly crushing.
I didn't catch the top when I took my earlier profits*, and likely won't have bought this recent bottom exactly, but content to acquire again at these levels. $1,568 was good enough for me.
* Nobody ever went broke taking profits in a frothy market!
I wonder whats going on in the Hardlicker cabinet at the moment.
Whats being served up dry, and whats on the rocks?
I think this will help. Courtesy to one of the guy whom I took it from.
Attachment 11981
Well the NZX low today was only 5c lower than yesterday whilst the ASX low was 80c lower, perhaps the kiwis recognize value more than their Aussie cousins. Lol
I bought today more than a dollar less the bundle that I sold early this year. Hope it doesn't go farther down by a dollar more 'cuz I'll enjoy using most of my ML limit to acquire more. Those of us that accumulated at less than 60 cents then are not fazed by not so growth-inspiring update anymore :cool:
Mr B reminds me of David Lange... who used to be said would go bombing around the room at parties. You see him here, you see him there , you see him everywhere..
Will probably be another day of battling the Trolls especially over at hotcopper where you even have paid professional Trolls present, us long term holders are a tough bunch though and we won't be intimidated by truth stretching and nonsense. PS-Will be off skiing tomorrow so looking forward to the break.Lol
They do like to bang on over there at HC about the Australia - China relations and the negative impact on ATM, because it's an Aussie company of course...or we're just another state of Australia...one or the other. Here's hoping the Chinese are a bit more world wise.
They must be having a laugh over on HotCopper. The trolls definitely out in force today, quote from HotCopper:
“ very good post , i agree i think this aust / china thing will effect a2 quite a bit. they like to attack good ol aus companies”
I think i posted here a few weeks back that TA 15.60 was the next leg down... doesnt hold here and this thing will go lower. On previous TA it should move up if there is no bad news. We dont check the news on this one as we are busy on other things. But we do note its TA. If you bought in the last few weeks prehaps you did not notice the hole in the chart that was potentially coming up.. or POT HOLE if you like to use non technical jargon.
"Should have Held" its a hard lesson to learn even when you older and have been in the markets for a while..wait for the white of their eyes before you bail and you will make more, a lot more. We have missed making a lot on that one over the years. All the good ones you had to hold and dont sell until the rockets are lifting off.
I am waiting for high $14s to get back in... or just buy what ever the price is during mid oct win or lose it will be a good hold again
Well I'm back on the board with a small buy in the low $15.30s. Remains to be seen if it's a good move or not. Will be happy to average down if opportunity presents as funds become available, but FOMO meant it was time to dip a toe in.
https://www.ig.com/en-ch/news-and-tr...-update-200929
Couple of brokers very dark on the downgrade.
Thanks for posting mate. Couple of further thoughts drilling down into the governance and disclosure element of this which looks more murky the deeper one looks for the nuances of the choice of words.
In late August the directors in their presentation under outlook say "Notwithstanding these uncertainties, overall for FY21, we anticipate continued strong revenue growth supported by our continued investment in marketing and organisational capability (I'll come back to the bolded bit).
In the following ten days there was heavy and widespread selling by insiders including for example the CEO of the Asia Pacific division selling 750,000 of his 850,000 shares, i.e. nearly all of them https://www.nzx.com/announcements/358806
One month later they come out with quite substantially revised guidance , just 6.8% annual growth. $750m first half, $1,100m second half at the mid point.
Drilling down into the nuances of this the company's outlook statement which was released contemporaneously with their FY20 results with 33% revenue growth, wherein they said the outlook was for "continued strong revenue growth". The presentation itself was titled "Building from Strength" What I find interesting is the choice of words here.
They could very easily have said for example we expect continuing growth in sales and left the word "strong" out, or they could have toned it down with "albeit at growth level's that could be lower than last year. Continuing strong sales growth implies on the face of it growth at a very similar strong level to FY20, i.e. 33%.
You could make the case that the outlook statement and overall tone presented a less than accurate picture of their real expectations at that time. The substantial selling shortly thereafter (acknowledging they have very short windows of opportunity to effect this), is at best very poor optics.
I think there are grounds for shareholders to feel aggrieved that the original outlook statement was more than a little too optimistic which begs the question regarding 2H sales expectations being 47% higher than 1H. (A cynic might say that they had to release an update that showed some growth expectations or there would have been a riot at the annual meeting about the insiders selling). In my very long career as an accountant I have learned that the very best guide to the future is the most recent past, not what happened last year or the years before that. I am cynical about the strength of the 2H sales recovery and I think is highly likely shareholders will end up having to swallow a couple of dead Covid rats with further downgrades to come.
It should be obvious to all investors that there's FAR MORE risk around 2H sales forecasts than 1H and its contingent on the diagou sales channel fully recovering, but will it ? Downgrades come in three's (Balance). In my experience this is right well over 80% of the time. 2H sales recovery to that extent looks optimistic / just plain hopeful to me. But like almost all things about the future, very little is absolutely certain, all we can do is try and extrapolate off current information, known trends and obvious and less obvious risks. Time will tell...
All have been working out for you , it doesn't mater how smart or how practical you are , things are done , news are out and the big boys made the decision. I got the concluded here.
UBS has a price target of NZ$22.70 and a Buy rating on A2M.
Bell Potter has a price target of A$13.75 on A2M.
Morgan Stanley has a price target of NZ$13.50 on A2M.
Macquarie has a price target of A$17.95 on A2M.
It is undecisive, so I take the top and the lowest and take the average of NZD$13.50 and NZD$22.70 .
The average SP for ATM is : NZD$18.10 .
It is a bargain. The Shorters are at it again every year.
Thought???
Concluding thoughts. Fundamentally the stock is extremely expensive for the forecast growth rate of 7% this year. Even with this rout at the time of posting the FY20 PE is over 29. I think there are far better opportunities for growth at a much cheaper price and it wouldn't surprise me in the slightest if there was no growth at all this year. Looking further out the Chinese communist party is whipping up tremendous nationalistic fervor to buy China made. I think growth in the future is going to be much tougher and more expensive to come by.
Growth has dramatically slowed over recent years and I think the best days growth are gone. It went from ~ $3 in March 2017 to $13 in March 2018 in just one year. You'll never see anything remotely like that again. From a TA perspective this still looks like a very risky hold to me. I think there's plenty more pain to come for shareholders in the short term. I'm in the Morgan Stanley camp and think $13.50 12 months hence is a fair call, (which suggests with a required rate of return on risk capital of say 10%) fair value is $13.50 /0.9 = ~ $12.15 now.
Check these and see for yourself.
https://www.shortman.com.au/stock?q=a2m