With full year npat guidance (implied) between $250m and $320m they've given themselves plenty of wiggle room that another downgrade probably won't be necessary anyway
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With full year npat guidance (implied) between $250m and $320m they've given themselves plenty of wiggle room that another downgrade probably won't be necessary anyway
Yes agree. I don’t believe they halted trading for 3 days just to fudge some numbers in the hope of Daigou returning before results are delivered. There are a few calculations floating around which imply that it’s pretty difficult not to achieve guidance, time will tell.
Fair enough. I think however that balance has a good point.
If fair value drops after the next result, it will drop for everybody and the institutions won't have a reason to support anything above that. If you think that fair value is above $10 (or any other particular number), than you must already know the next results - do you?
If ATM however surprises the market in a positive way at next result time (personally i think this is unlikely, but hey - your guess is as good as mine), than obviously SP will go up - no need for institutions to push up price, in that case shorters will happily do the job :):
Discl: neither short nor long, but interested observer.
Morgan Stanley seems to keep buying ATM over 5% until 20 Jan 2021
SPH Notice - Morgan Stanley and its Subsidiaries - NZX, New Zealand’s Exchange
25/1/2021, 5:10 pmPlease see attached a Substantial Product Holder Notice for Morgan Stanley and its Subsidiaries in The a2 Milk Company Limited ("ATM").
Disclosure of beginning to have substantial holding
Section 276, Financial Markets Conduct Act 2013
To NZX Limited
and
To A2 MILK CO LTD (ATM)
Date this disclosure made: 25 January, 2021
Date on which substantial holding began: 20 January, 2021
Substantial product holder(s) giving disclosure
Full name(s): Morgan Stanley and its Subsidiaries listed in Annexure A
Summary of substantial holding
Class of quoted voting products: Ordinary Shares
Summary for Morgan Stanley and its Subsidiaries listed in Annexure A
For this disclosure,—
(a) total number held in class: 37,173,201
(b) total in class: 742,606,937
(c) total percentage held in class: 5.006%
https://www.nzx.com/announcements/366676
Another increasing their holding
All these big instos like MS, Mitsi etc etc seem to keep buying and selling and make regular disclosures when they go up and down 1% or when they go over or under 5%
To me it doesn’t really tell me much about what they really think of A2 beyond they own heaps of them ....as such I feel some get hung up on these disclosures and read things into them what aren’t really there.
a lot of the insto's trade there long term holdings all the time. you would never know cause must of it falls under the levels of not having to disclose
Given that MUFG (Mitsubishi Financial Group) own Morgan Stanley, I'd say the two notices are related.
NZ & China renew free trade agreement
By 1 Jan 2024, all NZ diary exports to China will be duty free.
RNZ article here.
Nice boost to SP today.
Geopolitical tensions have been top of mind and topic of discussion for months, so I see this as being confirmation of basically throwing any geopolitical tension out the window for dairy exports from NZ.
All we need now is to continually remind people that A2 is in fact a NZ company... seems most Australians including the media think it belongs to them (much like the Pavlova, and Phar lap the Horse)
starting to form a micro base here.
From past experiences it seems to be following the same holding pattern ...wont make its move either side, only after letting management enlighten market .
So 10.80 holds and now testing the upper limits ...let'c see where courageous shorters come out :D
Shorters now just have to hope that the results miss guidance. I'm personally surprised with the uptick in the share price, which I can only put down to the signing of the upgraded trade agreement. This agreement was basically done and dusted and announced last November, so I would have thought it was already priced into the SP. Obviously the market was waiting for pen to paper.
If guidance is achieved, even the lower end of the range given, the SP will head north again, and at that point shorters will have missed out on a decent % of profit, had they locked in those profits at recent lows. Is this a case of bigger risk, less reward?
"Is "micro base" really a thing?"
it not on any web site but it's taking license...
U need to wait for August results to see guidance missed or not as this upcoming Feb HY results will be 670 mil as informed on 18th Dec ...that cant change too much in 14 days . Market will look for either some positive statement or upgrade of FY guidance to move . If they keep quite on both these subjects then its safe to assume nothing much changed after 18th Dec announcement
I must admit, Left Field, that I like the price of shares I own to go up. Logically though, unless you are keen to sell, there is no financial reason to want the price to go up and the lower it goes the better, as there is more opportunity to buy at a discount to what you think it is worth. Psychologically we want the price to go up to confirm our wisdom about what we think the price should be.
You are not alone...most of us like upwards movements in SP (unless you're a shorter)
I guess what we have been talking about is 'picking the bottom' of a downtrend because at some stage a 'sell' often becomes a 'buy'.
I'm not prepared to call this the 'bottom' and will leave that to others as I'm already over represented in ATM and am happy to hold what I have for the long term.
For others wanting some bargain ATM in their portfolio, I'm sure there will come a time.
Will be interesting to see when the shorts start to cover, after all they have approx 60 million shares to purchase to close their positions, close to $700 million NZD's worth. Thats a decent number of trading days even if average volume traded doubled or tripled.
Personally I’d prefer they didn’t, I feel the share price will recover without that intervention.
I guess the time will come when the cash on hand reaches a level which warrants commencement of a dividend, but I’d prefer they invest the money in acquisitions which will provide future growth.
That being said, it’s all very well for them to say they can invest the money more wisely than shareholders for a better return, but it’s yet to be seen what they intend to spend it on. The Mataura valley purchase and consumer packaging expansion barely dents the cash on hand, considering it was $850+ million at last update, and has likely increased since the last annual report.
what is the ratio of containers going back to china empty or full of exports. it appears US exports have been left on the docks since july, 3 in 4 containers are back to china empty as china takes it containers back as fast as it can.
I'm in a skeptical mood about the capacity of TA to predict anything. You can tell what the sentiment was and maybe that can be useful in trying to guess what the sentiment will be (like the weather, if it was raining an hour ago there is a better than average probability that it will be raining in an hours time) but that is the most you can get out of reading the tea leaves, is it not? There is momentum in one direction untill enough people change their silly minds and then there is momentum in the other direction for a while.
TA works well for me (most of the time)..... must say I haven't tried tea leaves. Prefer coffee.
Each to his/her own.
Meanwhile some deck chair shuffling at A2. Susan Massasso leaving..... but not really leaving 'cos she will stay on as an 'advisor' (no doubt a well paid advisor.) Interesting times.
Meanwhile interesting times for funds funding shorters.
its everything... the Baltic D.
the empty containers...
the defaults in the BM's.
Confused why you guys are trying to read tea leaves when theres an important announcement that we’re losing our Susan.
almost as bad as losing Geoff
yes, must admit today’s news is good. Last years news suggested she was leaving completely. Today’s news reaffirms she’s remaining in an advisory capacity.
I expect when the new CEO starts, he will most likely want to bring some of his own people on, this happens in most large organisations with a change of CEO.
Looks like BUB's quarterly report has some positive view of corporate daigou channel showing signs of improvement.
A similar commentary from A2 at release of HY report next month would see this soar..
I remain bearish, I could easily see this returning to $10.50 or lower soon.
Stats NZ bold headline
Dairy exports to China down in December
Leading the total falls in December 2020 were milk powder, down $227 million
https://www.stats.govt.nz/news/dairy...wn-in-december
Coincides with the container shortages that NZ also experienced primarily in December.
Attachment 12257
Solid finish on BUB chart last night, up 23% on good volume. Could well be shorts covering and pushing higher, let's see what's in store for them on A2 front.
with no bad news its risk on for this stock and it may be its being traded rather then held.
The cancellations in containers is a potential problem that we dont normally look into at the shipper level and the sales departments appear to be as bad as an Aussi bank on cup day. Sorry that container booking i sold you has been cancelled. Exporting good is not the perfect booking system we imagine it to be.
Great reading of the Reddit investors actions regarding shorts...........who will they be targeting next.
"Webjet, Tassal Group, Inghams Group and InvoCare
Heavily-shorted Australian stocks including these companies all rose on Thursday against an overall fall of Sydney’s benchmark ASX 200 index."
https://www.theguardian.com/business...ks-hedge-funds
A2 have airfreighted product at times - and although more costly, would expect less costly than missing sales or being out of stock. Airfreight prices up to China are pretty similar to pre-Covid, as the Govt are subsidising routes to keep stuff moving.
Reefer availability is particularly bad at the moment, unsure on GP containers. Problem is some Chinese ports are closed with Covid and congestion, which has been exacerbated by upcoming Chinese New Year celebrations. The container merry-go-round isn't going fast enough.
This was interesting, a possible further explanation for the drop in dairy exports in Dec:
"The co-op, in its latest global update, said China dairy import volumes increased by 10 per cent or 28,565 tonnes in November compared to the same period last year.
Westpac agri economist Nathan Penny was not reading too much into the December data,
"November was strong, so it's natural that it came back a bit," Penny said.
"When you look at the seasonal pattern and the 12-month total, there is nothing that really jumps out at you. I think it's just a timing issue," he said.
"They are big numbers and if one container ship gets processed a day or two earlier rather than later, then a big chunk of product can fall into one month and not the other," he said.
Penny noted Global Dairy Trade auction prices had started 2021 on a strong note, and he expected prices to tick up again at next week's auction.
ASB chief economist Nick Tuffley said demand from China remained incredibly strong, but there were some likely timing issues around export shipments.
"The underlying story still seems to be fairly encouraging," he said."
Mmmm we sure live in interesting times.
However, there is a huge difference between Gameshop which reputedly had 120% of its shares shorted (yes more shares shorted than on issue!!??) when compared to ATM's 7.9% shorted (at 22 Jan)
That said shorting brokers rushing to cover their Gameshop and/or other short obligations may be forced sell other non related shares to cover their mounting debt.
Will there be implications for ATM..... who know's!!?? Interesting times.
Where do you go to find out the number of shorter on companies on the NZX
There is no shorting on NZX. However ASX allows it and ASX data is available here but note data is delayed.
Like many have pointed out that after seeing what happened to shorters in US ...many may have started booking their profits in ATM ...which can be one of the reason why its become pretty buoyant in the last week or so ...U can easily feel its SP got a bullish sentiment and feel to it these days ...unlike before .
It will be very interesting to keep watch on delayed Shortman data ...I am curious if only short covering is the reason of this bullish feel or something else more substantial is cooking ...I understand Feb HY announcement is due in last week ...apart from tinkering with FY guidance nothing much is expected in actual reporting ...surely 670 cant become 700 !!
Also if shorts are covering slowly and if we see last friday figures to be only 5% short then what happens ....still a big if ...but very curious to find out whats going on for some real buying interest in ATM these days
Personally, I dont think the bullish sentiment is due to short covering. It appears to be more timed to the announcement of the signing of the upgraded trade deal (which personally surprises me as the trade deal was done and dusted last November). When short covering does start, that could lead to one almighty short squeeze. Id personally be quite worried if I held a short position in a company, with 60 million other short positions open. Any ounce of good news pushing the share price higher will see any profits on a short position quickly disappear, or potentially mean if they cant close their position in time (buy back shares) they may well end up paying more for them than when they took out the short position (as has happened nearly every other year). Previous years, its been common for A2 to increase several dollars after a trading halt is lifted during the pre open auction, so if guidance comes in within whats been proposed, it may already be too late for Shorters to close out positions. Obviously the same is true of A2 if guidance is missed, the share price has the potential to drop several dollars during the pre market open post a trading halt. From what I have seen and heard, I am leaning towards guidance being achieved, upper end.
Attachment 12264
26.3 days to cover based on average trading volume.
Interesting to see the A2 short squeeze movement gaining traction on HotCopper and Reddit. Perhaps we just need Elon to try it and add it to his Twitter feed how much he loves A2 milk.
I see someone has already messaged him. What a world we live in today..
Have been drinking a lot of milk lately as I'm back in the gym for the first time in years, generally tolerate milk well but do get a bit bloated. Tried a2 for a laugh and have to say I don't feel anywhere near as bloated after drinking it. It also seems to have less of a scent than regular milk, almost no smell when you have a whiff of the bottle - that's possibly just the anchor bottle though as I vaguely remember reading someone saying their anchor milk tasted different when they switched to non transparent bottles.
Anyway will keep drinking and see how I feel, I may become a believer.
Appears the HC brigade are now well and truly aware of Reddit effects to target heavily shorted stocks. Listening to a share commentator today who mentions some Hedge Funds with zero balances would not be a problem. Also outlining that most would short targeted stocks before lowering their TP finding every excuse to justify new valuations. Retail investors should care zero about shorters loses and put them on notice that their actions also had huge losses on others ...........sound famiiar for a2
GameStop shares shorted has declined by 8% in the last 7 days to 57.83 million, as some short sellers have covered their bets that the stock would fall. Looking at Shortman's chart for 22nd January A2m short sellers position stood at 7.88% or 58.5 million greater then GameStop.
What do you think would be next for A2M?
Or hard to say?
I wasn’t too sure how to take today’s announcement from government about climate targets and reducing cow herd numbers. They seem to think that they can produce as much diary with 15% less cows by 2030.
Personally I’d prefer they start by fixing child poverty, housing, and crime , then tackle the bigger issues such as climate change. After all they are already in their 4th year and don’t appear to have achieved much when it comes to the fundamental issues in society.
I did speak to a friend of mine this evening who knows a number of dairy farmers. He seems to think that the announcement today could lead to a increase in farmers converting herds to A2A2 protein, as apparently they receive slightly more $$ per kg of milk solids, and if their herd numbers are reduced, they need to achieve higher $$ with less cows. I don’t know enough about it to know how this works.
I imagine if farmers have limits placed on herd sizes, if they can achieve a higher margin selling their milk to be used in nutritional products then this makes sense, or perhaps it will just lead to a increase in dairy costs across the board, passed onto the consumer. Apparently NZ is already able to produce dairy at a much cheaper cost vs other countries, so perhaps a increase in this cost is inevitable.
Gregnz@ - Imagine increased dairy prices would be the result or discovery of new feed to stop cows belching or flatulencing: I found these interesting facts "which is a bigger methane source: cow belching or cow flatulence? Contrary to common belief, it's cow belching due to enteric fermentation. A cow burps and farts between 160 to 320 litres of methane per day."
LEMON@ - Not sure where this Reddit army movement will take a2 shares but this borrowing of shares what absolute rubbish.
Yes, but isnt the fact that our cows are grass fed one of the reasons the world likes our dairy? I wonder if there is a way to engineer a grass variety which creates less methane after consumption.
I can just imagine it, as a result of a methane reduction target, we start planting and harvesting grain and convert our herds to grain fed (if it produces less methane). One step forward, two steps backwards.
I'm not against doing what we can do as a small nation to combat climate change, I'm all for it. I just wonder though what impact our small nation has in the grand scheme, when countries like China and the USA contribute such a large % towards emissions.
We already have a low wage economy, with rising cost of living, and housing out of reach for many, but because we want to make a small contribution to world climate emissions, our population will pay more for food, petrol, gas, and somehow afford to buy an electric car (because we don't have sufficient public transport to rely upon, and we wont be allowed to buy a petrol car). Dont even get me started on the battery side of things, as everything I read suggests that mining lithium for a battery, and end of life recycling and disposal is just as bad for the environment as petrol.
I hear in the USA you already receive a significant rebate for installing solar on your roof, and a rebate when you buy an electric car. I'm yet to see anything here along similar lines. I would have thought thats where we would have started?
The solution is already there without cutting cow numbers
https://www.washingtonpost.com/clima...e/?arc404=true
Ex dairy farmer, 7 years ago I was quite excited by UK trials on a garlic product reducing methane with resulting increases in milk and liveweight over 25% in all ruminants (the methane is wasted energy). Like the mythical lawnmower running on water, went nowhere. Targets would easily be met if there was enough motivation to do more than talk. PS every time I lowered cow numbers I increased production and profitability.
Prof Keith latest article, about Sir Bob Elliot and some of the background on A2 - Page 23
Farmers Weekly NZ February 1 2021 by Farmers Weekly NZ - Issuu
Great article. I also took interest at the article on NZ dairy farmers leading the way in climate emissions on page 7.
Based on that article, we already have the lowest methane emissions in the world as a result of feeding livestock grass.
Yet our government wants to reduce our herd numbers? If we already produce dairy with the lowest environmental impact in the world, wouldn’t it make sense to increase our herd numbers and produce more dairy here vs countries with a much less efficient farming sector?
Smells a bit like another Tiwai point , close down production here where we produce the worlds cleanest aluminium, and produce more of it offshore where the environmental impact is more significant as a result of burning coal to supply electricity.
Also reminds me of the stance our government is taking towards natural gas. Stop extracting it here, and import it from overseas where they have to ship it here using a diesel powered ship, and to manufacture it offshore they burn coal!
You just don’t get it greg
Rod Carr (Chair of CCC) just compared Food producers in NZ with Whale hunters. When asked if he accepted that our farmers were the most carbon efficient in the world he said something like ‘Being the best whale hunters doesn’t make it good’
Omg, he actually did! What a nutter.
Attachment 12266
Attachment 12267
How does it end up that our politicians are so out of touch with reality, that their proposed climate initiatives actually have the opposite affect to what the world is trying to achieve.
Im no scientist, no politician, if normal everyday people like me are questioning these things, I’m very concerned at what our future holds.
Goes to show how it is a box-ticking, virtuous looking, nationalistic agenda, rather than really trying to do what is best and has the lowest emissions. Making sure we meet our obligations to climate accords, no matter how little difference it will make, or what economic damage it will do.
On a farming/A2 perspective, part of the issue is the emissions falls back on the producer. But with oil, it falls on the consumer.......don't see the Saudi's trying to plant pine tress.
Maybe its better to walk?
The amount of emissions' to produce a 1 kg eye fillet in Denmark is the same emission's as driving from Denmark to Paris
Are we entitled to ask what Rod Carr's qualifications are to chair the climate change commission? Previously a Reserve Bank economist - on the one hand this, but on the other .... - and last heard of, the Vice Chancellor of Canterbury University. Eminently suitable for the climate change role?
outta the short , why bubs result not too bad as far as sales go and the gme thing makes holding shorts risky now. great trade anyway $20 to just under $11
You get more rump per KG of Cow than you do Eye Fillet. So I would say its less emissions for Rump and more for eye fillet?
New man steps in next week ...things will start looking up
Hope Babidge doesn’t hang around too long .....been bad with him as caretaker .....and I hope he doesn’t get any incentive payments (contract said he could possibly earn $0.6m annually in incentives. Talk about Hrdlicka being in the trough ...Babidge maybe one as well.
First thing he will do is open up the cupboards and find all the skeletons pertaining to the double downgrades.
As for Hrdlicka, remember there was a disagreement over strategy - she wanted to accelerate marketing & promotional spend (short term pain) to offset the over-reliance on the Daigou channel?
Well madmat and kiora, apparently you are both wrong:
".... Some studies provide the carbon
footprint of beef in terms of the finished carcass, whereas others provide data for
individual cuts of beef. The carbon footprint of a whole beef carcass is generally
apportioned to cuts of meat based on an economic allocation; whereby the more
valuable cuts (e.g. sirloin) receive the largest allocation per kg than less valuable cuts
(e.g. mince)."
So, does eating eye fillet produce more emissions than driving from Denmark to Paris? The devil is in the detail and it is probably a meaningless comparison.
Sheesh this thread is often guilty of going off track, but we have gone to the next level now :lol:
its getting hammered today , must be the all that chat on emissions from steak causing people to worry over how many cows NZ will end up with once ardern and shaw BBQ a few