Regardless what you think, BUB shows China market is still in strong demand for quality western products. Plus borders are to open and life will gradually return to normal. Put all together, the future looks brilliant.
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It's almost shorts knew the SP is gonna go up, a good few days ahead........ that's the power of insider information, something that you and I won't have access to.
That's why they're on a yacht in the Mediterranean, and you and I are grinding in front of our work computer :D
Expecting a gap up open on the ASX into a good push, then hourly consolidation into the afternoon.
**I've highlighted you post.
You might not have access but you can still know something is happening by using TA..
With ATM insider trading was masked by numerous players playing the shorting game and ampifying the negative media noise..However being a chartist I could sense the underlying changing behaviour. In hindsight my entry actions were too early and I sold out late July to realise a -10%...A 10 days later I bought back the shares for 30c less when ATM respected the $6 support and confirmed the mid june year long primary down trend line break. Yes...I sensed this trading behaviour change back in early July...Anyone using TA and keeping an unbiased, unemotional attitude would have picked up that sense..
Part of my post (posted 26th August): "......but there is an investor dilemma happening as the crap news is still coming out yet the expected constant price fall has disappeared and replaced by price whipsawing all over the place ....There has been an animal behaviour (trading pattern) change ...This up down all over the place, failed breakouts and so forth could be seen as some sort of a market reversal sign as ATM struggles to change species between Bear and Bull..or..as investor's fear some sort of continuation event (hibernating Bear) before the Bear wakes up, regains control and the constant downward trend resumes..Time will tell. Markets are future looking."
Time has now told
Recently I have been mentioning a lot about price gaps...filling of gaps are great very short term trading opportunities as the price rises quickly to fill the previous gap down..Noting the charted price gaps areas and trade accordingly can be very rewarding. ATM filled the May gap down in the last 2 days. (see my 17th June gap chart post #21973)
Disc: holding ATM
Played out really nice on the technicals today. I'll run through how I traded this both long and short from a day traders perspective. Then I'll run through what I'm looking at tomorrow.
The gap up open on the ASX open yesterday on large sustained volume (this is critical). If you missed the gap up open, then the first 5min consolidation was the spot for entry around 12EMA (note low volume on pullback). Stoploss would go below the 5min pullback for below the low of day.
The sell level is a loss of the 5 min uptrend (closing price) or a break below the 5min EMA12 as I didn't want to hold through hourly consolidation. Stoploss keeps moving up to each 5 min higher low. These conditions weren't triggered yesterday.
So today I know that hourly consolidation is VERY likely. I also know that momentum is very strong and there is pressure on shorts to there is very likely to be a pop on the open. I maintain the same conditions as yesterday for my sell levels. This was triggered at around AU$7.06. At this point I sell all long and go short. This short is a smaller position size as I'm going against trend (higher risk), however I know that we must see hourly consolidation. I take some profit coming into support around AU$6.90 so that I am break even if I end up getting stopped out (risk mitigation). Next profit target was 5min RSI oversold or around low of day, so covered AU$6.80. 5min RSI oversold will often signal the bottom of hourly consolidation. I went long again at this point, with stop below low of the day.
So tomorrow... I have the long position. People will look at the daily candle ad see it as a big red flag. But zoom into the hourly chart and you see that it's just hourly consolidation, so isn't a worry in the slightest. We are in fact creating a nice potential hourly bullflag and a expect we will test and probably break the high of today tomorrow. I expect another strong open. The AU$7.40-$7.50 area is then the spot to watch coming in to resistance.
Attachment 13100
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Appreciate your input JTH......... Banks booming and S&P 1.71% overnight increase in US will help momentum
Way sentiment changed and booming share price we could see 20 bucks again sometime next year
Returning daigou & $20 would upset the 42m shorts I reckon......:eek2:
Why has the daigou never worked out of NZ - it is always talked about out of Australia?
.... deleted.
Bubble burst? Whats happening today. hmmm was hoping was on an upwards trajectory to be sustained. Surprising to see todays movement. Maybe it's not yet a sure thing we are in the clear yet. Was it just us hopefull's and the real movers are starting to cash out a profit already. I suppose a 15% gain up in recent days is decent enough for many. Seems to be steadily dealing again, what do you think JTH?
NZ has bonded stores who arrange delivery but IF banned sending by NZ post
Q: Will people in New Zealand be able to post infant formula to their relatives overseas?
A: No. If someone buys infant formula from a supermarket and posts it from New Zealand without following the regulations for exporting dairy products then they are operating unlawfully and outside the regulated export supply chain. This has always been the case under the APA. The law has not changed.
Under New Zealand law, any infant formula that is sent to anyone in China needs an Export Certificate (also commonly called a Health Certificate). MPI issues such Export Certificates. To receive an Export Certificate from MPI, the infant formula must meet MPI requirements for export to China and the infant formula must stay with an MPI approved Risk Management Programme (RMP) holder continually from the farm up to export. If infant formula leaves the RMP chain it is no longer eligible for export and MPI cannot issue an Export Certificate.
These rules apply to all dairy materials and products.
Last two days were too easy, so it's only fair today has been much harder to trade!
We set that hourly higher low in the first hours of trading (ASX), however we threw straight back (short term red flag). We are now in an hourly downtrend (short term red flag). Continuation of this rally is still the most likely scenario if the AU$6.70 level holds. If we get to AU$6.60 that'll likely be an excellent entry (gap fill).
Slow grind down (bit of a falling wedge) gives me higher confidence this is likely to bounce.
Danone also released a result in which it noted that the Daigou channel had returned to growth. These comments were in line with the recent Bubs Australia update last week.
https://www.nzherald.co.nz/business/jarden-brief-state-of-victoria-relaxes-border-crossing-rules/5XAIKT43B4KL6WJRH7HBU5ZHAU/
For those interested, this is what Danone had to say (excerpt) in their Q3 Sales press release:
"Infant Nutrition delivered moderate growth this quarter. As expected, growth was led by China which grew double digits with a broad-based contribution from all channels. Channels distributing domestic labels delivered another quarter of mid to high single-digit growth while International labels sold in crossborder e-commerce platforms kept posting steep double-digit growth. Cross-border indirect channels, which notably include Daigous and Friends & Family, were back to growth after having declined by approximately -60% in the same period last year."
Hmmmmm - continuing to power on.
Shorts continuing to cover?
Hahaha, guys said Daigou has dead, A2 is over, hahahaha
Up up and away now?? Or hit a wall $7.7- $8NZD? Seems like the rally is completely disregarding the law suit, and just focusing on Bubs recent update in being hopeful Daigou will re-establish. Shorts covering, but will this run out of steam and take another dive as approaches the key $8 resistance mark?
A2 Milk may face second class action claim
The a2 Milk Company may face a second class action claim after Shine Lawyers launched an investigation on behalf of investors who purchased shares between August 19, 2020 and May 7, 2021.
https://www.afr.com/companies/manufa...0211021-p591w7
From ATM
The a2 Milk Company ("the Company") is aware of media reporting concerning a
potential class action against the Company that is apparently being
investigated by Shine Lawyers. The Company is not aware of any legal
proceeding having been filed by Shine Lawyers at this time.
Big day for ATM tomorrow.
Will the sp sink or will it rise further on the back of the strategy update? Presumably there will be an earnings update as well.
https://www.nzherald.co.nz/business/...4DUQQKPO47RSY/
"Investors will soon discover what's next in store for a2 Milk after Covid-19 lockdowns, greater competition and a declining birth rate in China disrupted its infant formula business, causing a slump in the former high-flier's share price. A2 Milk's net profit plunged 79.1 per cent to $80.7 million in the June year due to the prolonged impact of the pandemic and a rapidly changing China infant nutrition market, prompting the company to review its growth strategy. Chief executive David Bortolussi, who has been in the job for just under a year, is set to update the market on that review on Wednesday."
DB has only been in the job since early February? You would think that the Herald & the analysts could at least get that right!
No matter how you slice and dice it the macro picture looks very challenging to me and there is already a lot of expected growth baked into ATM with the company trading on 42 times FY22 earnings and 30.5 times expected FY23 earnings. These sort of metrics used to be reserved for very fast growing companies. Is ATM still a high growth company ?
https://www.marketscreener.com/quote...22/financials/
dont think this article will help defend the actions.
Paywalled
https://businessdesk.co.nz/article/m...art-to-profits
Geometrica Fund manager Gary Hui could not believe the A2 Milk Company maintained its profit and revenue guidance at last November’s annual general meeting. Every single data point told one of Australia’s leading short sellers that the infant formula retailer’s forecast for revenue up to $1.9 billion in financial 2021 was too optimistic.
Relatively low turnover today and no big price movement.
Guess there will be a big gap down or up tomorrow when the strategy reset is presented.
Stock for the brave or the foolish? :scared:
Will be interesting to see if has caught the Bubs wave or not. Will be hammered if any more bad news.
I don't think its possible to overstate the extent of the reputational damage done here. Regardless of whether their actions last year are successfully actionable or not its clear their systems were antiquated, their inability to read the situation was mind blowing and the speed at which they have since moved to address the situation is best described as "glacial".
I think its also readily apparent the operating environment has materially changed and there's clear headwinds to growth going forward.
They can articulate any revised plan they like but can they execute it ?
Was really good buying at $5.50. I think Will have to be real positive for serious appreciation as already priced in. We will see
Not a subscriber but sure would be an interesting article
A2 short-seller reveals secret art to profits | BusinessDesk
When they have 150 pages of waffle explaining what they need to work on.
Page 157 (of 161) doesn't read that well
Trading update - There is no material change to the FY22 position as outlined at the FY21 August results announcement
And that was pretty vague back then
http://nzx-prod-s7fsd7f98s.s3-websit...594/357753.pdf
looked terrible the update
anz milk sales flat ( cant remember when they didnt grow ?)
US sales declined
mvm nutritional sales down
IF sales china lower than expected
looks the opposite of the bub's announcement
So an 'ambitious' revenue target of $2 billion some time in the 'medium term'
Jeez they did $1.73 billion not long ago
maybe. the stock is on very expensive fundamentals at current pricing . technically it has been trading in a range at the bottom 5.41 - 7.77. when you range trade at the bottom of a downtrend this is very bearish usually means a continuation of the prior trend. traders sold at the top of the range the other day
The crucial data & color of how things are really going investors are looking for will have to wait for the Q&A at the 11 am presentation.
Meanwhile, what do these statements really mean :
" ..... there was no material change to its position since that announcement, however it was seeing a different mix of business, favouring its English label infant formula over its Chinese label product.
Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.
While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.
In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'
Observation : Sounds like daigou channel is back and sales are doing much better than expected but sales in China is down. Given that English label sales were 35% more than China label in 2021, does that mean that sales & margins are overall up?
Thats my read of it all. Very comprehensive and interesting update. Clearly there are a lot of variables they are dealing with.
I think the market will be a bit disappointed short-term and we might revisit $6.00-6.50 but medium term it feels like they are building a better business with greater insight into the variables. Essentially in transition from ride the daigou tiger to a more mature brand business. Probably be another 12 months before some clarity starts to emerge.
Under my new mandate make the most of every day I am not going to wade through more than 150 pages but will simply observe the macro picture. I no longer believe this is a fast growing company that warrants the metrics this is trading on. From a TA perspective the long term downtrend is still intact. This is so far from where I see fair value its not worth my time digging further.
35% up on what. Does that mean English label is up a couple of million dollars and the daigou channel still down a couple of hundred mills from last year?
https://www.nzherald.co.nz/business/...KKHIXADW7JF6Q/
Targeting $2b sales in 5 years but oh my goodness that's less than 11% per annum average top line growth over the next five years, assuming they can even meet that target, (remind me again, how "good" are ATM executives at forecasting lol) - even if achieved that's slow growth in anyone's language.
But wait there's more - Targeting margins "in the teens" in the mid term but consensus average analyst expectations are for margins over 19% by FY24 and sales over $1.7b that year. Margins used to be 30% :eek2:
I think its clear this is a downgrade and this slow growing company is a far cry from the rate of growth and margins it used to trade on years ago and the PE was just on 30 when it was growing much faster back then but on yesterday's price the FY22 forward PE is a whopping 42 !
I think a fair PE for how this company is trying to slowly grow in the years ahead is no more than 20 which suggests on FY22 average broker forecasted eps of 17 cps this company is worth a fair value of about $3.40.
Oh dear, run for the hills :eek2:
Very grim ! Its a SELL
I think its crystal clear the market situation has dramatically changed and that change is permanent. First mover advantage with the marketing and pricing power than confers is long gone and never to return.
Should really be trading on very similar metrics to the slow growing Danone...FY22 PE 17.8 https://www.marketscreener.com/quote...34/financials/
A new CEO so no doubt will be very conservative and under promising. Interesting that the English label is improving. Daigou channel should rebound to some degree as Australia opens up. I’m a hold on the Stock and believe that there is a good chance at these levels of some sort of take over.
Well said, must say I give to CEO and the team for such a detailed presentation. Probably not great for shareholders in the short term, but this level of transparency was missing from earlier management. And good on DB to take bold step in that direction and give market more insight into company's operations and metrics.
Presentation is just that - easy to do and no doubt, would have been put together by consultants etc etc.
Market was looking for some hard data on how things are going and unlike Bubs, ATM either was unwilling or could not give a proper update on exactly how 1Q22 sales & margins have done. A really bad sign imo that the company is still in serious trouble on the MIS front.
Meanwhile, there is no compelling reason to invest in this stock - plenty of uncertainties still with what is an expensive stock at the current sp still pricing in strong growth.
So went up on the back of very good numbers from Bubs and then, Danone. I am simply making the observation that ATM has not produced any numbers and you can see the market reaction.
I was neutral waiting on the strategy reset all along but with the sp spiking higher in the last 2 weeks, thought there was a golden opportunity for ATM to update the market with good numbers.
Not only did ATM not update with good numbers, it did not disclose any numbers at all! Inexcusable !
Now I am indeed with Beagle that ATM is an uninvestable stock until sp is around $3.00 on current settings.
For sure but why would big players waste money on a stock if they thought it was going to continue to fall? For it to get anywhere near $3 the next result would need to be catastrophic which of course is a possibility but not likely, more likely a very slow grind forward from here.
BusinessDesk had a good piece on the ins and outs of Geometrica Fund shorted A2 from its highs
Wonder if Geometrica are still playing
https://businessdesk.co.nz/article/a...art-to-profits
Maybe paywalled
A bit disappointed, frankly.
Given the size of A2($1.2b sales even after largely dropped revenue), it is understandable that it's not so easy to turn around as BUB(less than $50m revenue).
https://www.fool.com.au/2021/10/27/a...stor-update-2/
Copied from Beagle’s posting?
‘However, any hopes that these plans would return A2 Milk to previous levels of explosive earnings growth appear to have been dismissed by management.’
As a result, management warned that “because of these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear.”
And if there’s one thing that market hates, it is uncertainty. Which goes some way to explaining why the A2 Milk share price is deep in the red today.
last low point was 6.11 on the 12th there about of oct so we should test there soon ..... come on boys hammertime
Surely it cannot be that difficult for ATM to properly update the market? No wonder the sp is taking a hammering and it's just gone below A$6.00. :eek2:
Compare & contrast :
BUBS update 2 weeks ago :
Bubs Australia’s (BUB) gross revenue for the September quarter has increased 96 per cent year-on-year to $18.5 million.
Bubs’ infant formula segment saw its gross revenue increase 124 per cent and the adult goat milk powder segment’s gross revenue grew 100 per cent year-on-year.
Domestic sales contributed 23 per cent of quarterly sales and declined 13 per cent, due to a discontinued revenue stream from a business-to-business customer.
ATM today :
Sales of English label product in the first quarter of this financial year were lower than the same period last year, but “significantly up” on the fourth quarter, when sales were constrained to reduce inventory that had built up.
While sales of English label product were expected to be down in the first half compared with the same period last year, they were expected to be ahead of expectations.
In contrast, sales of China label product in the first quarter were lower than expected, and expected to be “significantly down” in the first half.'
Line on chart seems to be below the 50MA and the 200MA
That’s not too good
"Past performance is not indicative of future performance and no guarantee of future returns is implied or given."
good old days seems way behind us.
Yeap, both from a fundamental and technical perspective this looks very grim. Many years of stiff challenges ahead. Unlikely to see $10 again this decade in my opinion.