Yes. Understand that. I guess I was hoping to understand why a company with seemingly endless downside, meaning more profit for shorters, would see millions of short positions closed in the past two weeks.
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like he said, you might not have understood and focused on the 'profits' part of his answer rather than the 'risk/reward' part.
simply put, of the 8% shorts a wee while ago, 2% have subsequently decided the risk of staying short isn't worth it and closed out; while 6% currently think the reward is still worth it staying short.
$10 in aus the line in the sand eh
Oat milk another growing challenge. My cousin Graham is a hard worker and a very bright guy. (I see he grows 7 or 8 things) ;) https://www.stuff.co.nz/national/124...uthland-farmer
A lot of advertising for almond milk on T.V at the moment too. I think they get the message across much better than the ATM television adds which simply claim A2 milk makes you feel better.
Can't help wondering if the groundswell to real alternative cow milk won't just keep on growing.
I agree, Oat/coconut & almond milk is becoming the new choice for many and it's also "cool" to be drinking alternative and many claim benefits.
I also believe you can substitute this for baby powder. Not 100% how this suits the baby but it's always a wonder.
I think you folk like 'oats' cos it rhymes with gloats lol...
this morning I was perusing the milk section in a local Night and Day shop in Dunedin.
No A2 on offer but https://otisoatmilk.co.nz/ was available at about $7.70 per litre.
I thought there was about 4 options available but I see their website only lists 2 x products.
bearing in mind this market research took place before I had received my morning coffee.
https://otisoatmilk.co.nz/ Hmmm...couldn't help noticing this claim
Lighter on the land. The Oat footprint is much lighter, according to global research. Producing one litre of oat milk requires 11x less land, 13x less water, 6.5x less fertiliser, and emits 3.5x less greenhouse gas emissions than one litre of dairy milk.
Hmmm...Wonder how much the price will come down too when they start producing it at great scale ? Maybe that factory they are looking to build in Southland is worth investing in ? I know who to ring to make more enquiries :)
Really one has to wonder if this isn't the future if its so environmentally friendly and good for you.
Can't help noticing Oat also rhymes with Moat...ATM used to talk a lot about their IP moat but have gone very quiet about that in recent times.
A 35,000km round trip for NZ Grown oats to be turned into Oat Milk seriously can’t be great for carbon emissions. If it’s going to be a ‘thing’ that’s good for the environment, then they definitely need a factory here.
Nothing wrong with Oat Milk, one of many alternatives to Dairy, but anyone who thinks it can provide the nutritional requirements needed for infants is seriously deluded.
Not as delusional as you may think.
I'm sure when a man said he will make burgers out of mould in a test tube everyone called him delusional also.
I just hope some posters understand that im saying that there is already formulas with alternative milk out there.
I'm not suggesting you should do that for your infants.
I'm just stating alternative milk is popular and they even have products for infants already in this deluded world.
Reason why A2M dropped below the $10 line in the sand?
A downgrade note from yet another broker this week:
"According to a note out of Citi, its analysts have retained their sell rating and cut the price target on this infant formula and fresh milk company’s shares to $9.40.
The broker expects the company to continue to struggle in the second half of FY 2021 due to ongoing weakness in the daigou channel and a resurgence in Chinese infant formula brands.
It appears concerned these pressures could be structural. Incidentally, for similar reasons, the broker has reaffirmed its sell rating and 51 cents price target on Bubs Australia Ltd (ASX: BUB) shares.
The a2 Milk share price is currently fetching $10.45."
I think there is only one minor point of difference: There is not more milk in "oat milk" than there is fun in a "fun run".
Oat milk is a white colored emulsion of squashed plant based substances in water which has (from a chemical and nutritional perspective) absolutely nothing to do with real milk. I must however admit that it looks similar like the white colored water they sell in New Zealand supermarkets as real milk (with all the good stuff which nature puts into real milk removed).
Speculation of lockdown in Melbourne to last up to 3 weeks.
Does anyone think this will be likely to affect A2 again with distribution etc??
Yes that is right it could have an effect though I heard the LD is for 5 days... maybe I should have sold these first thing last Tuesday like I planned but got talked out of it. Let's wait and see what the reaction is on Monday
Yeah, the word is Dan Andrews, the Victorian premier gave 1 hours notice for a 5-day lockdown to prevent panic rather than give the full details of a full lockdown for a longer period. Instead, it backfired and people when loco anyway.
Some lady in the airport cafe also was positive and had served thousands of travellers moving around the country.
As usual, I must STATE this is only speculation but it may not look good for AUS which I believe will affect A2 heavily if it results in another severe lockdown.
I believe it's the UK variant also.
Monday may not look to good!
Again this is the only word in the grapevine
I can sense a doggy blindfold taste test coming for this hound in the near future. I must get Mrs Beagle to arrange several small samples of milk, A2M lite, Anchor lite, Almond, Goat, Oat, and Soy Milk. Got to be something in there I like because to be honest I find my inclination to drink milk declining quite significantly in recent times. Back to things that rhyme with goat and oat, one thing that really worries me going forward for ATM is the apparent lack of any moat. For years they talked up the value of their IP and the protection it accorded them but its clear with the passage of time these claims had no basis in law or fact whatsoever. It makes me wonder about the integrity of the claims they make about "it just makes you feel better".
The second thing that really worries me is they are so heavily dependent on China. The inherent high level of ongoing (and rising in my opinion), geopolitical and trade risk that goes with that makes me feel quite uncomfortable about getting back into this stock in any meaningful way.
https://www.marketscreener.com/quote...apide&mots=ATM Market screener has them on a FY21 PE of 28.
We know one can make DCF models to come up with almost any valuation you like dependent on one's assumptions regarding the future growth rate, (which lets all be honest is anyone's guess).
For my money I will stick with my model which has worked very well for me. I take a no growth PE which is currently 11 and will pay 1 PE more for every 1% growth rate I think a company can =grow at on average for the next 10 years.
Running this filter over ATM even after the ~ 50% correction on a forward PE of 28 this suggests to me that for me to be interested in ATM (leaving aside geopolitical and trade risks for a minute), I would need to feel they can grow eps at a compound average rate of 17% per annum for the next decade. My best guess, (and that's all it is), is they are unlikely to grow eps at that rate on average.
I think the Chinese brands are going to continue to gain more traction and the long term prognosis for trade protectionism is worrisome.
I think their years of fast growth are behind them and as they fail my filter I am still happy to sit on the sidelines notwithstanding the ~ 50% correction in the last 7-8 months.
Quite apart from any attempt to have a guess at the average future growth rate I can't help noticing that the chart still looks really horrible. I think anyone buying in the current downtrend is very "brave" Trying to pick a bottom in a downtrend is a messy business that usually end badly.
Better to wait for a confirmed TA signal of a new uptrend and buy into upwards momentum, a far less risky proposition (Thanks to KW, Baa Baa, Hoop and others for sharing your TA skills with us).
All very good advice Beagle thank you... you are a smart bow-wow!! Thats the first time i have heard a formula for assessing PE ratio, yours seems a most useful way to get a perspective on that. Also good to be reminded to avoid downtrends even though they are tempting to average cost.. like last march when I kept buying HLG as they were falling from 6 bucks through 5 and 4 eventually i had to give up. I again bought more in the low 2s. We know what happened after that but it took until about 4.70 before i broke even. Absolutely crazy but I should have just waited.
We are going to get trashed for going off track, but I'd have to say that is a pretty weak "rule" of art! You are probably right although Jackson Pollock comes to mind, also Desmond Morris's paintings by his chimpanzee must defy the "rule of purpose". Also, wasn't it a big thing in the 60's to tie paintbrushes to animals to produce fairly random abstract art?
Discl: still holding ATM.
https://www.fooddive.com/news/study-higher-plant-based-milk-prices-are-justified-but-dairy-milk-is-too/594744/
"The key players operating in the a2 milk industry include GCMMF (Amul), Erden Creamery Private Limited, Freedom Foods Group Limited, Lion Dairy & Drinks, Provilac Dairy Farms Pvt. Ltd., Ripley Farms LLC, Taw River Dairy, The a2 Milk Company Limited, Urban Farms Milk and Vinamilk."
Hmmm, the A2 milk landscape is more of a 'battlegound' than I thought!
SNOOPY
Still blaming the Daigou aye, you'd thought for a billion dollar company they would've figured out how to ship their products via alternative channels by now, it's almost a year since the big lockdown.
Great reminder and reality check;
Related to your proposed blind test though would I recommend to add some real unprocessed milk as well ... all the stuff you can buy in the shop (particularly the "light" stuff) is compared to real raw milk basically tasteless. Waste of money.
BTW - real milk does not make fat (well, if consumed in moderation) .... the cream which they remove during processing is actually good for your body to process the good things in the milk (helps your body next to other things to absorb the vitamin D and use the calcium in the milk instead of just flushing it through your kidneys).
Gotto be fair - the pandemic has impacted on almost all businesses and ATM is no different from the other Australasian businesses adversely impacted by the Daigou disruption.
The greater issue though as you alert to is whether there is more to the slowdown in sales than just the Daigou disruption - the competition is certainly heating up out there and has ATM lost its ‘first mover advantage’ competitive edge and is its product premium pricing coming under stress?
ATM $44 per can vs Karicare A2 ind as by formula $32 per can.
Lately I have noticed Karicare A2 IF stock at two of our local supermarkets looking rather scarce vs plenty for ATM platinum.
And Karicare is launching a new A2 formulation shortly according to my contacts.
Does anyone give any importance to why pasteurisation was discovered and why all raw milk was advised to be boiled before consuming it ??
Processing of milk mainly pasteurisation still has many benefits and drinking not boiled raw milk is still not a safe practise for adults leave alone kids
Making milk light also has its advantages ...removing saturated fat is beneficial for majority of world's overfed population
Probably not the right subject for this thread - and I don't really want to get into all the nutritional quasi religious nonsense spouted around by nutritionists but changed every 10 years when a new generation of nutritional scientists starts to make their career. Most things we eat are depending on the flavor of the year either healthy or terrible for your health - but it changes: Meat, red meat, cholesterol, eggs, real milk, light milk, ... pick your choice in the right year, but difficult to keep up.
My family is drinking raw milk (with short breaks) for the last 60 years and we never had any related health problems and are all healthy, while a number of our NZ friends and acquaintances only taking in the oh so healthy "light" stuff suffer now from osteoporosis. Pretty sad. Some changed now to real milk, but I recon it might be too late for them ... if your bones are porous, you can't really refill them.
No kidding - we do know too many NZ friends / acquaintances with the light milk brain fad and suffering now under osteoporosis, while none of our friends and family back in Germany (where they don't have the light milk fad) suffer under this disease.
Making milk light has however a lot of advantages for the processor - it allows them to take all the good stuff out of the milk and to sell the remaining water to the full milk price to the people dumb enough to pay for it.
Obviously - if your calorie intake is too high and your exercise regime too light, you will gain weight and have other related negative health effects ... In this case it is a good idea to eat less and better and exercise more.
Anyway - each to their own :):
I do agree however with your comment on pasteurization. It is a good idea unless you can control the cow and milkshed hygiene (which is difficult unless you milk your own cow). We can :):
The primary reason milk is pasteurised in NZ is to protect the general milk drinking population ie families with children who drink milk for healthy bone growth, from tuberculosis, a disease that is still prevalent in pockets of bush areas around NZ where opossums are the prime vector of transmission to dairy cows. While the incidence is much lower now than it used to be due to TB testing of cows, it only takes an infected possum to cross a grass paddock to potentially infect cows grazing there.
Simple answer to your write up ....If u cant have your own cows and surety about their hygienic surroundings then its better to drink pasteurised or boiled milk
I am not fully sure that Calcium is depleted in trying to make it light but yes it may have an effect on its absorption by human body ...but normal people get equivalent or more amounts of saturated fats from other sources to help absorption of Calcium from light milk or fat depleted milk not calcium depleted milk !!
BP
"Some changed now to real milk, but I recon it might be too late for them ... if your bones are porous, you can't really refill them."
Aclasta infusions are one way of strengthening bones for those in the high risk fracture zone..Lots of research going on to those with bone loss,a big problem.
Results—Week 96
Percent changes in bone density of the spine were as follows:
- dietary counselling – minus 2%
- one dose of zoledronate + dietary counselling – plus 5%
- two doses of zoledronate + dietary counselling – plus 8%
I see a certain previous poster (with most of his funds in ATM) on here up to his usual tricks pumping it on H/C, in his element there. Desperado by the Eagles comes to mind. Heres hoping hes right for all holders.ATM a very small holding for me atp.
2.14 minutes onwards.
&
19.12 minutes onwards
Yes, I also agree. I liked her input. Was a more logical call.
We've broken down from the triangle pattern (on 10th of Feb) but the good news is we're on the other side of the previous substantial resistance trend, which is acting as support for the time being. the SP will break down fast if ATM breaks below this support.
10.50 was apparently significant enough to bounce off last time it hit that level but i don't see a lot of support there for a bounce, especially given we're approaching a bearish crossover in the MACD. 10.14 would be my short term target, which was support in a previous consolidation range.
9.10 target is still on chart too.
hope they can pull a rabbit out of a hat at the earnings meetings coz maintaining current guidance is not gonna break this structure.
Attachment 12308
https://www.shortman.com.au/stock?q=A2M
Meanwhile, shorters continue to cover - providing short term sp support.
They are playing it right - selling high and now, buying back low to lock in profits.
So who is selling to them?
Attachment 12309
6 month chart - Picture says 1000 words.
Greg,I did notice it was very quiet in here today...can it be that we have had a couple green days perchance?
Muttly & unbalanced & BS haven't popped in at all lol...
Very encouraging last two candles on the daily chart suggesting confidence returning. Early days though. Personally I’d expect to see more shorts closing their positions going into results next Thursday, but for that to happen they need some to sell to them, so swings and roundabouts. Maybe just nice to have a couple of days of positive price action for a change.
https://www.shortman.com.au/stock?q=A2M
Shorters continue to cover - providing short term price support.
Interesting week ahead.
A simple mind might look at the current situation as, about 6% of punters would like to see the price go down, whereas 93% would prefer the price to start recovering and go up. I’m happy to be a simple mind and open to the view that the company know they’ve goofed on the recent reporting and need to restore investor confidence, there’s a shipload of goodwill in current insto’s that will be wanting to see the turnaround. No pressure A2 and the new CEO. 😅
Crikey two up days in a row. Perhaps there is life in this old dog yet.
Interesting times.
So what would a simple mind make out of the 4% of punters at the beginning of Aug 2020 who would like the sp to go down vs the 96% who would prefer the sp to go up?
That's before the executives and directors started selling big lumps of their shares near the top?
Then there's the 7% before the first profit downgrade vs the 93%.
And the 8% before the second downgrade?
Even at today’s depressed SP some of us up over 5000%.. Not to mention 50% of holdings already banked. Remainder free held. ATM has provided my portfolio over 100 % returns for over 8 yrs and made my retirement a dream..
If this is torture in your eyes then I’m a sucker for punishment and happy to play the long game. JMHO..
LF, I am giving my objective view of the psychology of what's happening with ATM shares, its shareholders and the shorters.
It's a fascinating study of hope, fear, greed and other emotions at play.
The one observation I would pass on to all ATM shareholders is - Never get emotional with the stockmarket and with any stock - emotion clouds judgement.
When a poster/shareholder wrote that a 30% profit downgrade is not bad, you know that reason has gone out the window and the poster is in total denial.
Balance objective isn’t a word I would use to describe most of your posting. :eek2:
That said, fear not for me....
I’ve happily gone against your rhetoric before and have done well out of it..PLX/PX1 and ATM..
Not that I expect you to understand my happily biased ways... all dogs can have their day... and in my long term view it is too early to write ATM off yet..
Point to one of my postings which is not an objective assessment of ATM?
Can't help it if you are all so emotionally wound up with the stock that you only want to read glowing or positive postings!
And who is writing ATM off? Yet another example of an emotionally charged comment, surely!
Good on you Balance. Nice to see you haven’t written ATM off..
Better things to do thanks Balance. Now off to enjoy more of the sun. Cheers.
Ronnie you are not unique in your position. Most of us have been in similar situations.
Think XRO which fell from $40 to $13 now up around $150 when I last looked. Where do you see ATM in 5 or 10 yrs?
How we face such challenges defines us as investors. I wish you well and just wanted to remind some people that there are other longer term viewpoints and strategies..
As always DYOR and take responsibility for your own decisions.
Reading through this thread, the biggest issue going forward, once COVID and Daigou is sorted out, is that a ton of new competitors selling A2 milk is set to hit the market?
and fonterra taught the chinese farm management before they were sent packing. can see all those a2 cows running around china one day
APT was $8.01 less then one year ago now $150
Z1P under $2 went to $10.5 fell back down now $12
HGH 91c did you buy
OCA 40c did you buy
HLG $1.80 did you buy
TWE up $1.77 today on a sniff of promise
ATM $10.82 did you buy
sold BHP $31.00 less then 6 months ago now $48.50
sold PPH 5.20 went up past $10 ............can fill a page this is the share market
I hold a2 because I believe company has promising future IT GOES UP AND DOWN can't hack it GET OUT
ARE a2 holders in Love with the stock -- same as holders of SKC FBU SUM OCA HLG APT FPH HGH AIR...lot of these dogs also went down heaps now recovering
Hopefully in 5-10 years ATM will at least be breaking even for me. :D :eek2: But preferably up 100% from what I purchased for. Just kicking myself for not getting into it years ago as I don't drink milk!
The rest of my portfolio (well, except for CAV) is in the green and healthily so. It is funny how seeing one in the red irks.
It is called the red wine stain effect - you have a lovely valuable piece of spotless Persian rug and there’s a red spot on it. Your eyes cannot but pick it up everytime you look at the rug because it spoils the overall look and feel of the rug.
You know what to do in that case right?
Morbid fascination about what might be a good entry point (seeing as I made huge gains in previous years)
Repost of last week. I honestly think its anyone's guess what their future growth rate is, (so TA is your best friend, bet you never thought I'd say that) ;) BUT here is what we know for an absolute fact.
In years gone by ATM was on a forward PE of around 30 and it was growing really really fast and there was little if any doubt that the growth would continue at a very fast rate.
It is currently on a forward PE of a very similar forward metric, growth has really slowed since I sold out at $13 about 3 years ago and there is massive fundamental uncertainty about the future growth rate, the impact of far more widespread proliferation of alternative A2 milk products and a far worse geopolitical and trade protectionism environment as well as questions about how long Covid will be problematic.
This makes no sense whatsoever to me that the shares are currently on a forward PE of 28.7, (much the same as when things looked much more attractive) given how radically the growth outlook, (and other risks) has changed compared to how it looked three years ago..
If I had to take a wild stab at what I though might be some sort of guess at their future maintainable average growth late I'd probably pick a high single digit number like 8 or 9% and that suggests to me based on my own valuation formula where I try and find GARP stocks (growth at a reasonable price) on 1 PE extra above 11 for every percentage point of sustainable growth a fair forward PE for ATM for me to invest is 20 times FY21 estimated earnings. https://www.marketscreener.com/quote...22/financials/
Brokers currently have FY21 average estimate at 38 cents per share. My methodology for finding GARP stocks suggests $7.60 might be an opportune entry point although I personally think the ol downgrades come in three's has a lot of credibility so look out next week !
I don't think anyone's really especially interested in what gains people have made in the past with this stock, (plenty of Tesla zealots do that on overseas threads), what people are really interested in is whether this share is good value now or not ? My 2 cents is I see it continuing to underperform the market going forward, (after the last 3 years of woeful underperformance there could very easily be several more), and the PE coming back to something more like what Danone trades at, late teens - 20.
The growth rate has changed dramatically compared to the rate is was growing at. Some people get that, others think the growth will come back the way it was. Only time will tell who's right and who is wrong. I remain happy to watch this circus from the sidelines for now. Going forward I see better ways of making money with less risk than this, (unless the PE comes down quite a lot to reflect the current circumstances and geopolitical risk).
Hey beagle I wonder what the P/E ratio would be if you net out cash and treat the loss making US as seperate?
They can always stop the US part of the business, which they might do... unless they think it will contribute to future growth? Oooof in that case future growth would be huge!
Also does a company with a high return on equity (and no debt, therefore future growth is ‘cheap’) deserve a higher P/E ratio than another company with a much lower ROE? Hmm something to think about...
Not convinced by the bull or the bear case for this at the moment. I do hold a small amount though (less than their weighting on nzx50) still slightly in green.
Hey guys, no need to question beagles motives for his current deep interest in A2
He knows that when ATM share price goes up HLG often goes down .....and when HLG goes down ATM goes up
Maybe he is just positioning himself for the time that he bails from HLG ....maybe sooner than later ;):t_up::ohmy:
Hi James I think that's been debated a fair bit already. They pulled out of the U.K. because it didn't work so yeah, with the losses in the US another pullout shouldn't shock anyone.
Its clear they need that cash to grow the brand so attempts to back out cash don't cut the mustard with me and I really dislike any attempt at creativity like that although I have used it once on HLG but it's not a really pertinent factor in how I go about assessing a share, other than to note HLG are in an excellent position to pay huge dividends going forward and ATM are in a strong financial position to continue pursuing their growth aspirations.
The model is changing with their own investment in processing capabilities and that might be the thin edge of the wedge and we may see much more of that going forward, (a complete divorce from Synlait in the years to come wouldn't surprise me), so previous high ROE will likely change going forward.
For me it all comes back to growth and with the far more widespread proliferation of other brands and the tendency towards trade protectionism and the Chinese communist party extoling the virtues of buy Chinese made, the future growth trajectory looks far more clouded than it has in years past.
Others will have a different view of the future and that's fine. That's how I see it with my Beagle nose tuned up to long range food sniffing mode :) Easier feeds to be found going forward, elsewhere, simple as that.
No winner...HLG a classic free growth stock, the ones I like the most where you pay a no growth forward PE of 11 for a company with good growth...they're the best type of stocks of all where growth is FREE !! Never let it be said the NZX doesn't offer up the occasional free lunch where we can all be Winners ;)