growth rate is slowing , more expense coming
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growth rate is slowing , more expense coming
There seems to be some strong support at $10.30-10.50
go to bigcharts.com look up nz:atm
nice juicy hole in the chart , look up gap filling https://bioequity.org/statistics-do-...ys-get-filled/ 91% gaps are filled
http://bigcharts.marketwatch.com/adv...false&state=10
It will go lower once the asx opens
Ozzie open will be interesting, I'm not buying but if I was, I wouldn't touch it until at least 1pm.
Good for this to happen... imagine if they hadn't provided an update and just announced this stuff 'on the day'? Would be looking at larger than 20% drop I would think. At the end of the day, this is healthy to happen and keeps everybody with their feet on the ground.
Gross margin percentage for the full year is expected to remain broadly
consistent with 1H18, given the benefit of throughput efficiencies and
currency movements.
So margin are really falling but it has been masked by cost cutting and a favourable exchange rate
Noone seems to have mentioned yet, first half revenue of 434.7 projects with 0 further growth to 652 over 9 months. We actually got 660 so suggests a 4% increase in revenue last 3 months Vs first 6 months. How big an impact did those Chinese holiday sales have? I still hold but well in the money from my last purchase. New markets might take a while to ramp up significantly.
Yes, an accident waiting to happen, markets always hammer the highest growth stocks the hardest with even the slightest falter. pe of over 60 crazy
My worry is SML is also way too highly priced, having all my shares bought in the cheap years is good but still dont want to see a big fall
Come August, when they report their FY results you can bet that they would beat that number.
Everyone seem to forget to look at the long term bigger picture. Fonterra partnership, US market gaining traction, SEA market growing, Middle East market expansion and recently announced South Korea partnership.
Its just that market went bit crazy with valuation after the HY results announced. And basically valuation is now back to more realistic levels and long term growth still remains intact.
Watch the space....
Agreed, but the growth all came in the first half and will drop out of the yoy soon enough. Company does say revenue weighted to first half so maybe it's all fine and growth will continue. Must be a limit to what can be milked from China, need to see other markets like UK and USA pulling their weight.
wow, it is cleopatra material out there at the mo.
#milkbath
Forget about the gap fill - the whole pattern looks more like a giant island reversal, which is immensely bearish.
Roll back 12 months they said they would forecast to do $505mln for FY 17 and the actual came in at $549mln. Higher by $44mln with all the talk of supply shortage.
'nuff said, bring on August with actual numbers.
Interesting - current match price in Australia is AU$11.80 - NZD 12.85! Either the Ossies didn't yet read the announcement, or they are a bit more mature in their investment approach ;);
Anyway - possible that the people who sold out today below $11 will regret their decision by the end of the day;
Discl: bought some more but prepared to ride out a wee dip down to Moosie's gap ($9.50 ..) ;);
The Company is anticipating Group revenue in the range of NZ$900 million to NZ$920 million for the 12 months ended 30 June 2018. This takes into account the planned transition to new infant formula packaging during Q4.
Todays announcement suggest an impact of transition to new formula packaging during Q4.
It is not clear to me if without this transition the revenue in Q4 would have been more or less. Anybody has some insight in this?
I hope Beagle hasn't run out on to the road and been hit by a car.
Just a wee reminder to holders, take a look at the 52wk BAL trading range, $5.04- $23.07,nuff said.
The shorters on the aussie open will be what i'm waiting for before i top up.
Analyst average sales forecast for 2018 was $945m. They may go close to this but to be honest this was not the sort of trading update I hoped for.
I admit I was in the $1b+ camp. That said the SP reaction seems a bit overdone to me. Nothing too shabby at all with sales growth of 70% and its clear they're investing money in marketing growing their business over the long term going forward.
I'm not panicking but not buying either.
more on The Gap(s).. Gap 1 is shown by the blue line. Gap 2 is the red one. and there's a third Gap today (pink) but not so relevant as is has already been filled.
Gap 2 was filled in early April. Gap 1 is not yet filled and would suggest buying at $9.50, which is also where a lot of support would be found from previous sellers at that level.
hope this helps explain the comments a little more.
Attachment 9671
What a great buying opportunity! Gutted, we had a power cut at work, missed the 10.50, by the time I got home was already up over 11
Well after Asx opened I bought more on the NZX, I was surprised it didn't drop further on ASX open, many people must be buying on the weakness. Anyone who got in on the NZX earlier did well. The update 920 millions is steady as she goes growth. We were all hoping for that 950 mill -1.05 bill, didn't happen. This will return to 13-14's soon enough. MSCI buying will also help take up sell side.
Crikey what a day..... really feel for those who are hurting and who purchased at recent highs, but congrats to those like NZ Silver who purchased at todays discounted price.
Yesterday we were all wondering how the MSCI funds would get their portfolios..... well now we know. They have been able to scoop up heaps of shares today at greatly discounted prices. Today's opening 'gap' v yesterday looks very suspicious IMO.
I still rate ATM highly, and am still holding. Just needs some interesting news at the year end, like a potential listing in the USA and this things on fire again.
I also liked the last two lines of today's news release...
This information is to be included in an investor presentation to be given by the Company during an investor roadshow in Singapore and Hong Kong from 16 May 2018.
The MSCI funds can't get their portfolio until May 31st. Yes the trading update was given in preparation for investor presentations. The marketing spend will be about 40 mill more than last year so add that to today's guidance and you get 940-960 mill on an adjusted basis, not far off the 1 billion hoped for by many.
Re-posting my comment from earlier in the day, just to reiterate...
"Roll back 12 months they said they would forecast to do $505mln for FY 17 and the actual came in at $549mln. Higher by $44mln with all the talk of supply shortage."
Under promise and over deliver, that's been A2 management's modus operandi.
Looks like H2 npat will be about $85m v $98m in H1
So about $183m for full year ...double last year’s number
For those who love PE ratios EPS will be about 25 cents so at $11.25 trading on a (sort of forward looking) PE of 45
Yes sb9 but only 15 days left until the end fy i think they would be fairly accurate and it would be a pretty bad look if they were not in that range this close. Still a very tidy result and basicalky same percentage increass between hy17 & fy17 rev @ about 11.5%, so same rev growth between halves on larger base numbers is very good.
http://nzx-prod-s7fsd7f98s.s3-websit...046/279290.pdf
"Rome wasn't built in a day" Good things take time.
Back to 12 bucks by the end of the day ...not too bad
On a daily chart might not even be a GAP
you guys keep on convincing yourselves that the fundamentals will make everything alright. they might. but Mr Market is trying to tell us something.
the bottom-pickers today did well but today's bottom sometimes becomes yesterday's top. Sadly, the more I get shouted down on this, the more I will think that is more likely.
was always priced to fall one day, very hard to meet ridiculous expectations forever
I'm disppointed that Mark Lister from Craigs hasn't come out and said this is just a healthy correction
Punters need all the reassurance they can get .....especially when the headlines say that ATM collapse is so bad its bring down the whole NZX with it
Some people talking on here of ridiculous PE's is something I find a little amusing. Historic PE is completely inappropriate for a company looking to double or more its EPS.
Average analyst forecast on 4 traders is for ~ 30 cps earnings this year and just on 40 cps next year. Market is always forward looking with growth companies.
Check out some of the forward PE's on other major NZX stocks all with far more modest growth rates than ATM and you'll find forward PE's of mid 30's are not unusual. Examples FPH, POT AIA
My target for half way through FY19 is for the company to be trading on mid - late 30's forward PE for FY19 earnings of 40 cps giving about $15 later this year.
The long term growth story is well and truly on track.
I think you're possibly being a little conservative with FY18 eps. What's clear at this stage is they're prepared to invest serious money to grow the brand and company over time. Short term pain for long term gain ?
Analysts quite possibly will pull back their FY19 estimates a bit.
Got my 25 cents from their sales and margin guidance and bumped marketing up to $82m and you get about $183n npat.
On their guidance you can’t get to 30 cents but as sb9 has reiterated several times today ‘under promise over deliver’ is their game.
Pretty big numbers whatever
https://www.nbr.co.nz/article/a2-mil...se-jr-p-215671
Contains significant commentary and explanation around the rebranding of infant formula and its short term effect on sales. Serious investors should simply pay the $35 for behind the paywall access for the month to read it. I am sticking with 40 cps for FY19.
Had a fun time reading some of these reactions to a theoretical 5% miss on revenue consensus ( if they don't outperform their own guidance yet again )
Consensus for FY18 revenue used to be 750, bumped to 800, 820, 880 and latest leap up to ~950 was shown to be mostly on point, even if a part of the market was expecting upgrade cycles to continue this is solid announcement showing incredible growth on last year and continued market share growth in China and fresh milk in Aus..
Time is a friend to A2, 950m will be a distant memory come 2020... HODL
Come back in a few months.
Let's remind us they are debt free and have a huge amount of savings too.
Well I am hoping that the shares I bought at $10.50 was the right decision..... $11.47 looks like the start tomorrow as it finished at au$10.54 tonight. Today even though I lost money I gained some back in this transaction... But I thought $10.50 was a bargain
https://www.nzherald.co.nz/business/...ectid=12052708
Pay special attention to what well regarded Harbour Asset management's analyst has to say about the short term sales impact of the rebranding is.
I think the market has well and truly overreacted to a minor sales expectation miss directly caused by this one off rebranding.
No worries, back to $13 as soon as this is understood better by analysts and investors.
For the time poor: "Harbour's Rimer said that had it not been for the rebranding, a2 Milk's projection would have beaten market expectations "handsomely".
That Herald article - The Harbour man might be right but the Devon man thinks a little differently -
A2's Milk's share price was sold down to a similar degree in March when news broke that international food giant Nestle had launched an A1 beta free infant formula in China, and today's price action may have been linked to that, said Devon Funds Management's managing director Slade Robertson.
"The announcement by a2 Milk today highlights that the competitive environment for this business has deteriorated as evidenced by the additional spend that it requires for marketing their product in China," Robertson said
Devon entitled to their point of view. Harbour analyst just came back from a filed trip to China and I posted their report the other day and they are very happy with what they've seen on the ground.
Some of the extra marketing spend might be tied in with the new packaging. Harbour analyst said in behind the paywall article that the annual marketing spend was in line with their projections and forecast. I think Harbour are the ones doing the legwork here and putting boots on the ground with multiple trips to China whereas the Devon guy with a vastly inferior return on their funds is just joining what dots he sees from a distance.
Possibly a bit of confirmation bias from both analysts but I'd back Harbour over Devon any day of the week.
Increased Marketing spend is not, in no way a sign of deteriorating competitive environment... just about every year A2 have increased marketing spend over expectations to obtain a greater share of the market.
Perhaps when you want to keep the growth at anywhere near these levels you might need to market the hell out of it.
We will let Devon carry on underperforming.
A very good reminder over teh past couple of days on why I am not a trader. i couldnt pick yesterdays highs, couldnt pick todays lows. Had a couple of bids in for more ATM and SML but neither wefe met. Never mind. Still happy with overall holding and profit to date and happy to continue holding
So to buy 50c in cash per share you have to lay out $11.30 (market closing price today). From a strict cash acquisition perspective, that sounds like a terrible deal.
And of course the reason A2 are 'debt free' is that they have only recently transitioned from a loss making start up. Loss making start ups are always 'debt free', because there isn't a snowballs chance in hell of any bank lending them any money!
SNOOPY
Beagle did Harbour do lots of field trips to check out CBL before they lost $50m of their investors money? I treat all analysts with a grain of salt - some people are good and others aren't. Harbours performance has been good mainly because of A2 and one swallow, although it has been a big swallow, does not make a summer to blindly hang my hat on.
Weird thing about yesterday’s announcement was that there wasn’t anything really new - they had said at half year sales were going well, margins in H2 would be about the same as H1 and they would spend heaps more on marketing.
They did feel that analysts, like Sharetrader cheerleaders, were getting a bit too excited and so put some colour around the numbers to temper that enthusiasm
No surprises (to me anyway) - fits with my $180m to $190m npat forecast.
Interesting day though
Has anyone noticed that Ballamys also took a 10% hit yesterday. This stock has often been compared to Ballamys when charts were involved. Just interested and curious as to why they also went down so fast yesterday....
It's how it goes in the infant formula sector - sell down of BAL as market thought "BAL growth may be slowing too". Not that anyone's growth is slowing at all, just a few people expecting greater rev for second half for ATM. Still exceptional growth and huge potential going forward. This is the share market after all, take the opportunity and buy. This is surely one of the best companies with the most potential on the NZX and ASX. I can't read the future but I'm sure the current share price will look very reasonable in a few months and very cheap in a few years,
It's really simple, yesterday's release was mainly in preparation for the investor days, old labels caused guidance to be less than many hoped for, upward trajectory mode activated.
That's a cheap shot. Growth companies are not exactly in over abundance on the NZX and CBL blind-sided a lot of people.
The record is Harbour have been right with ATM and Devon have been badly wrong. As a long time major shareholder in ATM I would think their analyst has Geoff Babbiage's number on his speed dial and the latter always happy to take the call. I for one am more than happy to take Harbour's analyst's explanation of repackaging at face value and I think the company is on track for 40 cps in earnings in FY19. That's puts ATM on a FY19 PE of just 28 at $11.30. If you can kindly direct me to another NZX stock that's growing faster on a similar PE I am all ears Attachment 9674
P.S. Beagle's far more attractive than basset's.
Both ATM & BAL price drop had nothing to do with performance just a couple of funds accumulating and wanting a bigger profit. In BAL case a simple look at the ssh notices will tell you the answer................. On HotCopper they are laughing their heads off at the huge bonus granted yesterday for both stocks.
IMO
Sure are and ive had some great wins from those quality posters on H/C, and made friends with a few too.