Didn't check Fri afternoon. Ouch. LOL. Oh well, life continues. Hopefully sunny Xmas Day.
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Didn't check Fri afternoon. Ouch. LOL. Oh well, life continues. Hopefully sunny Xmas Day.
My gut instinct tells me that's now a reasonable PE going forward, (I think once a new floor in eps is found this year future growth is going to be much slower and much more expensive to achieve) but we will have to wait and see what eps is for the year. With the speed and severity of the recent downgrades something much lower than 38 cents is quite possible, even probable.
Excellent high caliber post.
Agree about the rat comment 100%. My nose for corporate creative B.S. has been giving a reading off the charts for quite some time hence the persistent loud warning barks.
Agree 100%. Its a real shame Geoff Babbage is ending his career on this very sour note. I can't help wondering if the game is up with ATM with the strong growth in competition ?
Whatever happened to the valuable IP and patents that ATM used to talk about so often in years gone by ?
I think the shares are a great short at $11 and are headed in the short term considerably lower but I'm not going there in terms of shorting them.
For what its worth folks I know the Kingfish group (Barramundi and Marlin included) do regular company visits and are talking to the management of the firms they invest in on a regular basis. This is one of the ways they have consistently achieved outperformance in recent years.
I agree with u that his is shorter's perspective ...so he highlights negatives more ...moreover its easy to kick a person when he is down ...
What worried me more after reading both downgrade communications ...now they stating that covid impacted Daigou channel decimation is leading to CBEC slowdown also ...how that happens without brand loyalties being shifted or more A2 alternatives available or in reality the a2 brand not as strong as we think it to be ...after all milk is a commodity only ...whats special about A2 milk from ATM company if others also offer A2 protein only milk etc
Also they said other products sales also being effected not only IF in China ....this also they are attributing to Daigou vanishing thus publicity associated with it vanishing which provided them with free grass root level exposure to chinese nook and corner as all WeChat sellers put posts on their account about things they can daigou in ...these posts which show ATM products and its benefits to all friends of that WeChat seller back home ...( All are very well connected back home ..reason they become WeChat sellers )
Think brand loyalty of Apple phones ...people wait to get it ...they dont switch to other easily available brand doing the same stuff etc ...A2 milk seems to become more commodity then speciality product of ATM with so many A2 options available to chinese people ...maybe its exposing the lack of strength of ATM's brand value
Yes the market is so huge that sales can still grow ...but growth rate and margins can be issue going forward ...IMHO
Dont forget the New Zealand component with brand loyalty or switching to other A2 brands. Many people who bought A2 did so because it was manufactured in NZ, and this is something that locally produced Chinese brands can never match.
Agree ...just because the Board weren’t prepared to change was no reason to sack her
And bring Babidge back was a big big mistake (said so at the time but most revered him)
Chairman Hearn seems to have been a non-event over the last year
Hope new guy is good ....else A2 will never catch up on the year they they lacked leadership and failed to tackle new challenges.
I predict the cost of achieving growth and the level of same going forward is going to be considerably more challenging than in the past. Geoff Babbage definitely looking past his prime at the ATM annual shareholder meeting https://www.nzherald.co.nz/business/...+December+2020
Maybe both getting Jayne on board and bringing him back was a mistake ?
One more downgrade to come, possibly 2 before the end of FY21. I suspect they will only do $1.3b turnover in FY21 and gross margin at the low end of expected range. My estimate for FY21 is $250m net profit after tax = 33.6 cps. Choose your PE but I would not pay more than 18. Fair value in my opinion is ~ $6.
Gosh, all things considered, I wouldn't want to be invested in FPH, with a P/E of 48+ , full year revenue of only $1.26b, and a after tax profit of only $287m. Yet people happy to pay $34 per share. or Ryman for that matter with a P/E of 25+, generating profits of only $242m and currently $15+ per share.
As Snoopy has observed, that cash is required to fund future growth, once a new low base is established in FY21. Without it and the future growth the cash will be used to generate the shares are not worth a PE of 18 so my view is adding back cash on hand is inappropriate. Likewise the brand value is what drives hopefully some modest growth going forward and therefore I would argue is already encapsulated in the metrics I have chosen.
I know $6 seems radically low but I have always been happy to sail my own race and use my own nose to find sensible value.