Let’s move on... just heard from a friend about NZ herald brokers picks for 2021. Three brokering firms have picked A2.That’s a good start for the new year!
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Let’s move on... just heard from a friend about NZ herald brokers picks for 2021. Three brokering firms have picked A2.That’s a good start for the new year!
Bring back Beagle - I love the vibrancy he brings and he offers insights I’m not smart enough to have.
Cool down periods may be ok time to time but I miss B already.
Attachment 12168
A banned Beagle is for Life, not just for Christmas.
Meanwhile back on the subject of A2 Milk.....
I agree. Beagle freely shares his knowledge and is happy to answer queries from those of us who don't have his wisdom or experience. This forum would be a poorer place without him and the many other posters who are happy to share and educate others.
Sure not everyone agrees with everything that is posted here (and yes sometimes boundaries do get pushed a bit) but without differing opinions what a boring place this would be...
This forum is a amazing place to learn and share ideas. But we all need to remember not to be keyboard warriors. We all have reasons behind why we want the company's we invest in to go up. Maybe some have reasons for the shares to come down.
Many times I have read posts and started replying aggressively but realised before clicking "post reply" to delete the message as it gives no helpful insight into anything. Yes I speculate but don't we all.
I enjoy the insight of Beagle and others and its value on a site like this.
We all need to take a look at ourselves and our behaviour at times.
I have my own opinion on Atm as well as all the company's I invest in. Right or wrong they are just opinions and we all have to decide ourselves.
Disclaimer. I have not dipped my toes in with atm.
If you look back on this thread far enough you will find I have posted here more than enough times to make me look foolish :-).
However, since it is a period for reflection, I will write a short treatise on why I haven't invested in ATM, which is not meant to be a lecture on why anyone else shouldn't be invested. In short it hasn't suited my own investment style for the following reasons:
1/ I don't like investing in shares where there is no profit being made. This reason, as far as ATM goes is now historical. But in the early days there was huge expectation built into the share price before the company proved itself.
2/ I don't like investing in a company when I don't know how management will address the inevitable 'speed wobbles' of growth. Many investors assume that a growth company will keep growing at an ever increasing rate along a smooth growth curve. IME growth is never that simple and changing expectations of growth can hurt the investor more than any actual levelling off of the growth curve. The current profit downgrade is an example of this.
3/ I don't like investing in a share that is largely dependent on one market when I don't know that market well. Profit wise ATM is currently a Chinese market one trick pony. Yes I know about their early success in the fresh milk market in Australia. But any profits here have been dwarfed by the success of infant formula in Australia (where the daigou shifts much IF to China) and the Infant Formula sales through more conventional channels to China. My investment in US listed Yum China is gradually filling in my knowledge gaps in this area.
4/ I like to buy my shares with a margin of safety. To work that out, I prefer to see a longer operating trading history than ATM has. With such an attitude I miss out on all the great growth stories from first float. But I also miss all the growth stories that don't go so well.
5/ Lastly I hear the words of Buffett ringing in my ears. These are along the lines of if you don't understand an investment to your satisfaction then don't invest. Or in baseball lingo.
"There is no need to swing at every pitch."
One day I may have the confidence to invest in ATM. But I haven't reached that point on my personal investment path.
SNOOPY
Piss poor weather and cricket boring as and the races not that exciting so why not play around with a A2 valuations model
My sales forecast for the next few years below in chart below. A blend of historical growth rate decay rates. analyst forecasts and of course an assessment of factors impacting A2 - in other words some maths and a lot of guesses
Extrapolating from 2023 into the futures and more (calculated guesses about margins and expenses etc) I get a DCF valuation of $16.37 using a discount rate of 10% (my base case). Lower the discount rate I could it up to $20 plus.
So this analyst says BUY - 12 month target $18.01
I think Buffett is happy if he comes across one or two new investment prospects in a year. So maybe this is where the baseball analogy breaks down. But to carry the analogy a bit further anyway. At this stage in my investment career, I don't need to hit home runs. I am happy to bang the ball into mid field and scramble around the diamond base by base. That doesn't mean I lower my standards at the cost of investment mediocrity. But I am happy to build up my run total is a measured slow and unspectacular way.
Looking back I guess my best home run was Restaurant Brands. I could never have dreamed it would have been as successful as it turned out. But I never thought of that as 'going for the big one'. It was just as much a rerating of the business, not just the underlying business performance that made my returns so spectacular. I had no idea the business would be rerated as it was. I like to think it was skill building up my holding in the years when RBD was unloved. But in truth I think I had a fair amount of luck with the market ratio rerating that I could not have predicted at the outset that played into my hand.
SNOOPY