Probably does mate but if it works for MAC it'll work for me as well.
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[QUOTE=NT001;512461]FWIW I pulled the following trading totals in ATM from Yahoo.com for the six months April 17-Oct 17, correlating them with the fall in share price over that period.
April 17-30 (10 days) 13,774,100 shares SP fall 85c to 81c
May (22 days) 44,229,000 80c to 78c
June (21 days) 50,863,000 78c to 69c
July (23 days) 21,331,400 70c to 65c
August (21 days) 21,907,000 63c to 64c
September (22 days) 25,193,500 62c to 58c
October 1-17 (13 days) 8,686,800 59c to 55c
Six-month total 185,984,800 85c to 55c
Trades equivalent to 28% of the company’s 660,066,979 shares on issue have taken place in six months.
There were three days, in May-June, when trades exceeded 10m shares, and there have been three other days when they were approx 6m or above. The last really big trading day was 26 August (8.25m)[ bang on information NT but with all these sells whose buying without triggering the substantial holding requirement
[QUOTE=ziggy415;512496]My guess would be fund managers (long term kiwisaver funds), with less than 5% and a multitude of small investors seeing that 55c is pretty good value, worth a crack based on perceived growth expectations, and sharebroker price targets around the 70c to 80c range. I am predicting that Milford will not buy much more in the near future given that it is getting closer to the 20% of issued capital mark and the liquidity issue inherent in the shares.
Appears as ATM is slowly having a lower weighting in some Milford Funds.
Probably a combo of both ATM price decline and Milford not topping up anymore (buying other things wih their inflows instead)
Some tend to try and build risk into a DCF base case like Forsyth Barr very often do, but that just leaves a prospective investor in a position where they must then analyse very carefully for themselves exactly where the analyst has been fair or unfairly conservative. It means their valuations can be very often a bit low too.
Some prefer to apply company set goals and targets and forecast beyond there based on available market analysis and product cycle growth curve estimates for each market and product. At the end of the day the company is the closest to the business, they may not be correct and there are always unknowns, they may perhaps though have the best window seat.
But, at the end of the day if anyone is trying to use DCF to model short term (under six month) moves in share price, forget it, there are much better type of model for that, DCF won’t help you with that much.
Attachment 6373
Interesting to re-read what Brian Gaynor wrote in a sharemarket review in the Herald of 5 July. Here are the comments he made relevant to A2MC, whose shares had just fallen by 10c to 70c in the preceding five weeks.
The NZX MidCap Index appreciated 17.9 per cent in the latest June 2014 year...
The top performing mid cap companies have been Diligent with plus 2467 per cent, A2 Milk 1050 per cent and Pacific Edge 625 per cent...
Company earnings are the sharemarket's most important driver even though a small number of companies may be an exception to this rule. Xero and the other loss-making technology companies - both here and overseas - are obvious examples of these exceptions.
Yep, the long term value in ATM is in the value proposition and the gross margins.
Do you find the ATM reports difficult to dissect though, would be more content if they also reported ‘underlying profit' ie before intercompany charges.
But, having just gone from operating in a single market to four in just two years, the potential flood of all that concurrent return in earnings downstream is what values ATM.
Attachment 6374
Buyers building up. Just got some at 56c. Is this the turning point?
It seems that Fonterra is struggling in the Aust market despite discounting reasonably heavily (SST article) , yet A2 corp is going from strength to strength seemingly.
I have a view but interested in others views.
Looks like 1 ltr of a2 fresh milk is being sold on the jingdong website for $12 nz dollars. You will also see A2 baby formula listed along with some interesting books for the chinese to learn more about A2 milk. A translation of the below page also shows they are doing a Buy 1 get 1 free promotion for the fresh milk. Shame we can't see the amount being sold.
http://search.jd.com/Search?keyword=a2%20milk&enc=utf-8
In case we all forgot, this is what the baby formula factory looks like. Taken from 3 News some time back.
Attachment 6375
I picked up a copy of the "Don't Drink A1 Milk!" book (but not from this site). It's by an American, Brent Bateman, a human health campaigner who now lives in Thailand. It's not very well written, could have done with a decent editor, is self published and draws heavily (with acknowledgements) on Keith Woodford's book. If you've got the Woodford book (advertised below it), you definitely don't need this one. But it's interesting that someone out there who is not connected with A2MC is pushing their barrow for them.
Hmmm, after the buy out of Wiseman I had thought that ATM had price ranged tested the market in the UK, had settled on a long term retail price, and now it was all about growing market share at that settled price from the twenty a2 converted farms.
But, today the UK retail price is back up to the upper ranged limit, perhaps a nice sign of forward confidence.
The a2 price is £1.99 per 2.0L, compared with say Tesco (home brand) £1.00 per 2.27L (4 pints)
Attachment 6378
a2 Whole Milk 2.0L (99.5p/L)
Attachment 6379
Tesco Whole Milk 2.27L (44p/L)
Normal milk in tesco supermarket UK apx .90 nz cents per litre
Normal milk in NZ supermarkets apx 2 dollars 50 a litre
Why when we have all the cows do we have to pay nearly three times as much for milk than UK consumers.
It was done here too, Fonterra still add it as far as I’m aware, happy to be corrected.
http://www.nzherald.co.nz/business/n...ectid=10834725
New Zealand fresh milk prices are high because we are paying an equivalent international milk powder market price. Milk here is value added and exported, why would any company sell it in local supermarkets at all unless they could get a similar export level gross margin.
Edit: Permeate contains lactose and a1 protien, so you get a nice double dose in your cheap milk.
I think I remember from frontera that milk prices are set by what the market in nz will accept not international prices. Basically they make lots because people will still buy. Sometimes they do a pr line like we will reduce our price but not often. Then of course what do supermarkets make as a mark up, they may pay less but keep price the same.
In New Zealand the milk price is controlled by Fonterra - if the supermarkets don't like it, they don't get it.
Utter rubbish - there is significant retail margin in milk in NZ, this is the reason ATM will find it difficult to crack the NZ market.
http://www.nzherald.co.nz/business/n...ectid=10834725
New Zealand fresh milk prices are high because we are paying an equivalent international milk powder market price. Milk here is value added and exported, why would any company sell it in local supermarkets at all unless they could get a similar export level gross margin.
Edit: Permeate contains lactose and a1 protien, so you get a nice double dose in your cheap milk.
Wow, this article is super negative on milk permeate - jesus "snot like substance" blinkin heck its only liquid form milk sugars + minerals which are extracted in production of whey protein concentrate (WPC) or Milk Protein Concentrate (MPC). Better than them dumping it.
Off topic I know but interesting to see such a one sided perspective.
And NT, if they ever get to a point where they have maxed out the export market for a2 infant formula, and let's face it that's probably a few if not many years away, the next product of the rank with the next highest gross margin is very probably a2 milk processed into a2 whey protein concentrate (WPC) for export.
Imagine that market of really quite health focused gym going folk wanting a2 rather than a1 WPC.
Here comes the big buying at 58 cents . $1.00 by XmasXmas
Significant volume* at a higher price today. Isn't that usually the point TAers get excited about?
You might need to sell some of those BRM and buy ATM instead Winner.
* Still no SSH from either side
Go back a few posts ....Hoop has already shot me for being stupid but I happy with this going to 60 cents and then 70 cents and then overshooting my value of 69 cents to 80 cents and then 90 cents and maybe even a buck sooner than later if the big takeover happens
Whats this BRM you mention
Still big buying and no notice. They have cleaned up the 54-57 sellers now the 58 is target. A notice must be close.
Still 500k of shares to depose of at 58c and only 200k of shares interested at 57c with a volume of 1.3 mil sold today.
No buyer is getting too enthusiastic at the moment but maybe it will pick up as we move towards the AGM. Still a lot of selling pressure around the 57 58c mark
Yeah big trades off market. Someone is accumulating so I think 5 percent ssh is what we will hear.
They would have ssh by now if they were above 5.
As I speak big trade on market 58. The move is on. Price driven down now they buy.
Yes I see it at 58c but not at 78c Jasemc! (wistful thinking)
Yeah bit ahead . Fixed back to 58.
It gave me a nice warm fuzzy and excited feeling when that 1.1 million buy order was placed at 58c late this afternoon.
Wish had some dough on this one.
http://www.theaustralian.com.au/busi...-1227102856618
Hypothetically that A$100M Perich have available for investment in the dairy sector would buy another 29% of the a2 milk company at these levels.
They can’t though grow an empire with only one or two companies I guess, and perhaps at 17% they are already at their diversification limit, who knows, Perich also seem more interested in growing ventures from the ground up with seed capital rather than investing in going concerns, but still some of that cash may find its way into ATM, they are after all very bullish on the a2 milk company, time will tell.
Maybe this news item in today's The Australian (paywalled) helps explain what's been going on with the ATM share price lately. The timing is interesting. As I've suggested previously, the Perich family look like the most likely candidate for a takeover of A2MC, rather than one of the big international players.
They own 60% of Australia's Freedom Foods which is the biggest single shareholder in ATM with nearly 19%. Their Lepparton dairy farming operations were among the early suppliers of A2 milk in NSW. Although this report makes clear the family are backing dairy products generally, not just A2, the last paragraphs give an interesting insight into their strategy and their belief in the superiority of A2.
Perich empire to pour $100m into dairy operations
- The Australian
- October 27, 2014 12:00AM
THE billionaire Perich family is working on ploughing as much as $100 million into its dairy empire in a bid to capitalise on soaring demand for milk products in Asia and to encourage more farmers to return to the industry.
Family patriarch Tony Perich, who is managing director of the Perich Group, said the spending would be across its suite of companies, including new milk manufacturing plants, new products and buying up farms.
The Perich family’s Leppington Pastoral Company milks more than 2000 cows at its state-of-the-art dairy near Bringelly in western Sydney.
It also has a 60 per cent stake in listed food company Freedom Foods, which makes allergen-free breakfast cereals, as well as fresh and long-life milk beverages and seafood.
Freedom in turn owns a stake in the New Zealand-listed A2 Milk Corporation, which makes high protein milk that is easier to digest.
The family’s wealth in this year’s BRW Rich List topped $1 billion for the first time, putting it among the 40 billionaires in the nation.
“I can tell you we are looking to go bigger into dairy ... I believe in the industry,’’ Mr Perich told The Australian.
“We will probably put about $100m into it. That depends if we can get enough milk. But if we have to, we will.’’
In April, Freedom’s Pactum Dairy Group announced an agreement to supply premium long-life milk to Bright Dairy, one of China’s largest dairy *companies.
It also supplies to A2 Corporation, New Hope Dairy in Chengdu, Shenzhen JLL in Guangzhou and is in advanced negotiations to sell fresh Australian milk on the booming Ali*baba online retail platform in China.
Earlier this year, A2 struck a deal to supply fresh milk direct to homes in Beijing, Shanghai and Guangzhou through Chinese online retailer Jingdong.
Pactum is now expanding its Sydney operations at a new site in Ingleburn that will open next year, as well as growing capacity at its Shepparton plant in Victoria. In August it bought a $4m neighbouring property to its Shepparton plant to more than double its land size.
Morgans analyst Belinda Moore said last month that it expected to see “a large step change in Pactum’s margins in FY17’’ from the Ingleburn investment.
“Now we are encouraging farmers to come back into the industry by exporting overseas. We do believe there is a big market for UHT and long-life milk. If you have a modern factory and keep your costs down, I believe you can certainly compete in the market overseas,’’ Mr Perich said, adding that he was passionate about the future of the dairy industry.
“We have the best farmers in the world, but they don’t get *treated like that. There is too many people going bankrupt, committing suicide in the farming industry because they are not getting a fair return on their *product. And that is not right,” he said.
Freedom Foods is on the lookout for further Chinese partners for its dairy business and Mr Perich said he and his brother Ron as well as chief executive Rory *Macleod had visited China to meet the company’s current and potential new partners.
“Why did my brother and myself go over to China? Because they want to meet the owners. After talking with them, they were very happy with us. They saw we were genuine farmers. You have to go over and see these people,’’ he said.
“If you can be honest with the Chinese and not try to put one over them, they will be very loyal to you. I think we trust them more than they trust us. That is a *problem.’’
Freedom’s share price has risen from about 75c in April last year to as high as $3.25 at the start of last month. The shares closed on Friday at $2.87.
Mr Perich said the family would never sell below the 50 per cent level.
“Our management knows that if we drop below 50 per cent, we are out of this company. Unless we can keep controlling the direction where we think it should go, we would not be involved,’’ he said.
But he added that it was *important the company had an independent board.
“We have an independent chairman and we like to have some independence — that is important.’’
Malcolm Riley, head of nutritional research at CSIRO’s Animal, Food and Health Sciences division in Adelaide, claimed in April that some claims made about the health benefits of A2 milk were “staggering”.
A2 contains a different type of protein from regular milk: beta-casein A2.
Asked about the comments, Mr Perich replied: “All milk is good, but A2 milk is better for some people and you can feel the difference. Try it,” he said.
“We know there are benefits in it, but to get that proven, that takes years.
“What I am saying is, you don’t have to believe it. But once you go on to A2 milk and you have drunk it for a month, you will feel *different. A2 milk will never *rubbish ordinary milk. All milk is good. It’s just A2 is better.’’
Hah! I see you just beat me to it MAC. I was just trying to get around the paywall barrier I ran into.
I was in Byron Bay two weeks ago and was amazed at the amount of A2 milk available in the supermarket.
Was able to try the light blue for several days and I'm sure I felt better in the tummy region.
Unfortunately I cant get it here in Palmerston North at the moment.
So let me get this straight
1) A while ago Freedom Foods (majority owned by the Australian Perich family) publicises a statement that they 'retain the right to sell down their substantial ATM holding', concerning some in the market even though it was really just a hollow statement.
2) ATM shares undergo a (IMHO) rather suspicious regular pattern of trading driving the price down in which time no SSH notices are issued from buyers or sellers (barring the earlier ones from Milford buying)
3) This trading didn't occur on Australia day
4) Over the last few days comments have been by others on the site that the selling appears to have stopped (price has since appreciated slightly).
5) A couple of days later the Perichs claim they have $100m to spend up on 'dairy investments' in a major article that very much talks up their love and belief of A2.
If that's just coincidence then it's very uncanny - chances are probably similar to winning lotto.
NBT
NT. IMHO I don't think Freedom will make a T/O bid any time soon although they certainly may increase their shareholding higher than where they are at the mo. I really do not see any immediate imperative to do this. Fairly easy to increase shareholding currently though by getting the weak sellers to off load around the 59 mark, then excite a few more by gradually upping the buy price up into the low 60's. If Perich is wanting a bigger exposure to dairy then he won't be doing it through Freedom foods and whatever entity he is doing this through may be below the 5% threshold, if they are indeed doing it at all despite their positive comments coming through about A2. Interesting to see what happens next week but I am not expecting much
I agree Harrie, as I said above (2283) I've always seen see the Perich family as the most likely source of a takeover move, not Freedom which would appear to have its own expansion plans. And not in the short term. But Perich would probably be looking to mop up weak-selling A2MC shares as you say. Freedom shares were quiet today.
Well, it seems that the a2 fresh milk price in china has settled at 59yuan up from 49yuan, so I’ve adjusted my numbers for 2015 and 2016 revenues as below;
http://item.jd.com/1199167.html
http://www.farmonline.com.au/news/ag...t/2712968.aspx
ATM forecast volume for 2015: 3,000,000 1 litre bottles
ATM forecast volume for 2016: 6,000,000 1 litre bottles
Jingdong Retail Price: 59yuan = NZ$12.39
The internet retail price in China would have probably been agreed by ATM to maintain a minimum gross margin after transport costs, Jingdong margins and overheads.
COGS overall are likely around 65%, as per fresh milk in Australia, although it could well be a lot better than that given the opportunity value of the market.
This provides for;
2015 gross revenues = 3,000,000 x 12.39 x 0.35 = NZ$13M
2016 gross revenues = 6,000,000 x 12.39 x 0.35 = NZ$26M
Not a bad windfall market at all when one considers analyst consensus total revenues for ATM are FY15 NZ$149M and FY16 NZ$202M.
Thus, this new market may well represent 26/202 = 13% of total revenues in just two years.
A new market every year, it’s up and away with this company.
What I really like Blobbles is that there is just a few months lead in compared with say opening up the UK and US markets which takes a few years for herd conversion, processing agreements, regulatory requirements and to grow a base retail market, all that stuff.
In this case the a2 milk company just packages in NSW as usual and airfreights to an already established home delivery internet retailer in China.
By the way, those figures don’t include ATM’s plans to prospectively airfreight to Singapore, Bangkok and Jakarta also.
Post reporting analyst consensus if for 34% revenue growth, still working up my own estimate.
My feeling is that it shouldn't take very long at all for the UK operation to show more profit. A2MC has a well established sourcing and production relationship with Muller Wiseman Dairies and is now doing its own marketing, building on the retail network already built up. It has said that consumer demand is already strong. Not as if it's starting from scratch
One thing I can't quite get my head around is the fact that A2MC's four-man board includes Billy Keane, whom A2MC proudly boasts is the former head of Wiseman Dairies (presumably lost his job when Muller's took it over) and is the current chairman of Dairy UK, the dairy sector lobby organisation. Why would A2MC have the head of DairyUK on its board? DairyUK is the enemy. When the results of the Curtin trial came out recently, DairyUK issued a strong statement saying it was a load of crap and proved nothing, and there was nothing wrong with ordinary milk. It used the same argument that has been used by the dairy industry in NSW, that ordinary standard milk is fine because it's got some A2 in it, mixed up with the A1.
And since then, Keane has joined the board of Graham's The Family Dairy, the chief rival and arch-enemy of Muller Wisemans (the partner of A2MC). Looks to me like a right muddle, unless I've missed something.
Sorry, in my second paragraph above, it should have read "A2MC's four-man UK board"
2 million shares passed in an off market transfer today. Are we scraping the bottom of the barrel now?
Nice to see ATM get a wee lift this morning or is that just a technical thing.
The AGM is only three weeks away now, what are shareholders wanting to take away from it this time ?
Interesting that the SP has lifted by over 5% on just 200000 odd shares? (as at 1:30pm)
ATM SH meeting on 18th Nov. I guess MAC what I would like to get some comment on is as follows:
1. Sales volume growth in UK and USA
2. Underlying profit margin in each of those areas
3. Effect of patents expiring in the short term on ATM's competitive advantage
4. Sales volumes of fresh milk and infant formula in China over the last few months or following registration of Synlait products in China
5. Estimated or revised revenue targets for F/E 2015
Looks your seller may have offloaded their last 2M chunk on Friday with those buyingnow knowing they are finished pushing the SP up again. Game of chess this one is...
Seller is back, every minute or so sells a few more thousand...piss off.
Just remind me ... who would benefit from artificially keeping the share price low?
As well - already more than half a million dollars volume today, if that's just "play-money" to manipulate the share price, than we must talk some pretty deep pockets.
Discl: at this stage just watching ... don't hold;
http://dairy.drinks-business-review....271014-4416736
have to keep trying hard to push sp down before some good news are released :)
I guess the shape of the trend curve looks very similar to other so called growth companies (like WYN, XRO, PEB, to name just a few). Admittedly - they make already a profit (the others don't) , but the PE (around 60) is outrageously high.
I suppose the trend will go up again if & when
- they either manage to get their PE down to acceptable levels (i.e. either increase earnings or drop share price) or
- if shareholders are again chasing the tech growth bubble or
- if they consistently demonstrate a growth rate justifying their current PE (which would mean a growth rate around or north of 50%):
quite difficult to do that sustainably
- if some unexpected / random event happening which would bring A2 milk into the focus of a new group of potential share holders
with deep pockets (like WYN's announcement of their deal with the UAE authorities, which launched their SP ...)
Just my 2 cents.
Agree ..
Still accumulating..
Blah Blah for the hundred what evers ....
I realise you're joking, but a more practical issue is why baristas and sellers of other specialist products using milk are not being pressured by their customers and educated by A2MC to switch to A2, as some are in Australia. They proudly advertise the fact they are a2-only, partly because they say it makes better coffee.
In a price competitive coffee shop/café market I wonder how much the coffee seller would have to increase the cost of a cup of coffee to maintain profit margin when using the more expensive a2 milk.
Or perhaps increased sales would allow for a smaller profit.
Any coffee shop owners like to comment.
I was buying a2 flat whites at the local café when I lived in VIC, it did cost more actually, was a couple of years ago, might have been an extra 20c or something like that.
There are quite a lot of exclusively a2 café’s now though, all they offer in those café’s is a2.
Not sure you'll find any coffee shop owners here, advertising in the local market isn't really important for ATM, would though be interested in any cafe's offering a2 in Christchurch if not too far across town.
http://www.theage.com.au/victoria/a1...523-38ue7.html
If you can get five cups of coffee from 2 litres of a2 and you pay $2 extra for a2 2litre, then that is 40c charge extra on each cup of coffee. If you get 10 cups then it's only 20c extra charge. This has given me a good idea, and might visit a couple of cafe's very soon, but will make sure they are close to countdown or other a2 supplier. I will keep you posted.
Will be interesting how far the lastest seller is going to push sp down. The seller, selling about 8,000 to 10,000 shares every 3 minutes for over 5hrs on Friday. Will the seller carry on come Monday? If so, it looks like the seller can choose to push sp down to whatever price they want. Thats ok by me, will just wait and jump back in when they have finished.
Interesting article MAC posted regarding A2 specifically dedicated cafes in Vic Australia.
The points raised in that article lead me back to my little hobby horse regarding highlighting the fact that a large % of lactose intolerance deemed to represent around 20% of the UK market could be associated with A1 beta casein intolerance and not lactose at all.
Question for the 18th MAC: What is A2 doing in the UK about getting the supposed lactose intolerant to try A2.
If there is no reaction to A2, what a fantastic story that can be made.
Q2: Is there any A2 supply problems in the UK currently?
Our seller has a name finally:
https://www.anzsecurities.co.nz/Dire...spx?id=3740884
Yes finally . end of may is when things started to drop fast.
whats with this kind of stuff? Can anyone educate me on why this occurs repeatedly.
30-Sep-2014 AMP Capital Investors
(NZ) Limited Share acquisition $1,207,129.64 2,081,258 2,081,258
30-Sep-2014 AMP Capital Investors
(NZ) Limited Share disposal $-1,207,129.64 -2,081,258 -2,081,258
OK so ANZ have just dumped 14.3 million shares onto the market. They have only got another 37 mil to go!
Suspect as I have been saying that its a mandate requirement...too much exposure in a relatively illiquid investment, trustees not happy etc etc
We should get a fairly good indication over the next week or two whether the selling has stopped there or they are going to continue.
The real issue is that originally at 7.7% of total shareholding you would expect that as part of their due diligence they would have courted some discussion with ATM over future prospects....is it those discussions or just a more conservative stance on "growth" assets?
Who has been buying?
I’d be interested Harrie if you have any further gauges for the UK.
We haven’t seen an increase in the number of a2 farms, still twenty, but many of those may be in the process of conversion as demand requires.
Certainly the average retail price is much higher now well into the HY15 reporting period, and the google trends thing is drifting up, it’s only an internet thing, but then ATM tell us it’s an internet marketing game in the UK.
It will be good to get some progress though, are you going to the AGM ?
Attachment 6435
http://www.google.co.nz/trends/explo...4%2010m&cmpt=q
14m shares accounted for. That's about 7% of the 180m-odd ATM shares traded since May. Still waiting.
And how sure can we be that AMP isn't just acting on instructions of a client?
AMP man busy filing forms out today .....lightening up on a lot of investments.
Was something about the future of AMP investment team in NZ, maybe those who have left were the culprits in buying so many dogs.
AMP man busy filing forms out today .....lightening up on a lot of investments.
Was something about the future of AMP investment team in NZ, maybe those who have left were the culprits in buying so many dogs.