bull wouldn't have a clue what is reasonable value for the stock, one thing I know is that a few years from now the current price will look so cheap you will think it couldn't have been.Lol. PS-Its not smart money that is selling currently.
Printable View
That Jayne going to end up with zillions of shares in due course
http://nzx-prod-s7fsd7f98s.s3-websit...947/282910.pdf
Bollie bands tightening
Usually good isn’t it?
good day today for shorters might buy me some real milk tonight - anchor milk
Not looking strong chartwise atm and recent shorting below fwiw. The last column the one to look at.
Date Gross shorts 1 Issued capital % Capital shorted 2 Trade volume 3 Shorts as % of volume 4 Mon 16th Jul, 2018 453,486 730,039,067 0.06% 3,201,906 14.16% Fri 13th Jul, 2018 800,516 730,039,067 0.11% 4,570,976 17.51% Thu 12th Jul, 2018 1,143,772 730,039,067 0.15% 5,386,751 21.23% Wed 11th Jul, 2018 1,327,039 730,039,067 0.18% 5,151,242 25.76% Tue 10th Jul, 2018 564,873 730,039,067 0.07% 2,860,810 19.75% Mon 9th Jul, 2018 321,467 730,039,067 0.04% 2,020,420 15.91%
Hope you don't mind me removing the chart, it was helpful to review.
So, it appears the weight of shorters' has decreased over the past 7 days (minus today).
This overlayed with the price action would indicate a fall purchase demand at market price, and the apatite for the market to see the price fall.
I would assume this is related to the PE ratio being high, and "flavour of the month" being to identify and actively avoid companies with high PE ratios such as ATM/A2M.
Looking at the chart, the next realistic resistance is around the NZ$10.21 mark.
Going on talk of the effects of the international trade war which is heating up, we are looking at a 10-15% drop in share prices which have not been factored into markets. One would expect those reliant on targeted export markets (China, USA, Germany, Turkey) will have real falls which surpass locally targeted products and services. I am starting to think we are looking at a NZ$8.60 bottom on this movement, which is a short to mid-term motion. I still think I am crazy, but this is what my gut tells me when I look at the chart, and the company numbers with a new company leader and going into untested waters both as a company, and as a global marketplace - even if her last name is Herdlicker.
Is anyone else thinking the same as me? I still hold and am feeling very uncomfortable.
herdlicker? easier to pronounce i guess
They did $262m in the latest quarter hampered by old labelled stock. I think some people are going to be very surprised by first half sales for the current financial year as retailers stock up on the new labelled product. Disc: Holding 6% portfolio allocation as part of a well diversified portfolio.
Correction is probably a good thing, shake out the weak holders ready for the next leg up.
@visionary ... I think you mean support, rather than resistance at 10.60, which is correct on the chart and your number 8.60 below that. ATM is in a shallow descending slide, but there's no compelling reason why it will drop to those levels other than it is slowly declining. TA is better for getting one out and keeping one out and looking for an entry than it is holding looking for a last ditch sell to preserve capital. TA'ers are well and truely out now, the patient ones won't be putting some timeframe on when to buy, they will be informed by the sentiment, as shown in the chart. TA'ers don't buy into the euphoric 'she'll be right' nonsense, just because some guru bought higher and talks up their book incessantly while hurting on their capital losses, they just act when it's time to do so. Rinse and repeat.
Today’s looking like it will a good day for the A2 shareprice
yeh totally caning it so far , up 7/10 of 1%
:p
sorry man just couldn't resist.
a nice day for the shorters so far
A sea of red everywhere
Won’t make a prediction about where share price will go today ...looking good though
bollingers spreading , death crosses everywhere short term . think a test of the bottom of the range is in order
break of $10 in aus is of importance , long term still in uptrend at this stage alot will depend on new boss and fundamentals going forward she has to prove herself i reckon before it goes higher
I think Herlicker is a bull.... given her background, I am holding, but looking for more at the right price. I am excited at the prospects with the new lady at the helm, the great team behind her and the experience they can share together to make something amazing. It is scary times for all commodity related stocks right now, so I think the key is a strengthening in marketing - which is where the money is being spent.
Post this, R&D will need to be ramped up to take it in the same direction Fonterra went, on a slightly different (and hopefully long term more efficient) tangent.
A bull I am, but not a bull in a paddock prior to calving season yet.
Its the repetitive glee you display whenever it goes down that gets especially tiresome. Its plainly obvious to anyone whether the shares are up down or sideways so gloating every time they go down is always going to be irksome to the majority of people who are long as it adds exactly nothing to the thread other than to invite angst...surely such a thing is a simple enough concept to understand. Winding people up deliberately, as you have now admitted, is deliberatly antagonistic and a breech of the rules of this forum.
I be guessing but there's a few longs who will be sitting on decent capital losses hoping for a breakup out of this five month sideways down phase. You'll be attracting a bit of negative attention poking at them. Like are you actually short, or is that a wind-up as well?
Like all of us eh
When I posted it started heading up ....went positive for a while
Seeing you have told me off in no uncertain terms I’ll cease making daily predictions
I live in hope of the share price going up ...probably against my better judgement in knowing that invariably overhyped overpriced shares tend to fall their highs until they find a more stable level (whatever that may be)
A poster (who was revered here) on another forum said that A2 chart shows a classic "exhaustion gap" and a "climax top" on the 22nd February ......and it’s been downhill ever since eh
as a trader im both long and short at any time, i do not love any stock as baa baa mentioned traders react when it is time up or down. im not saying long term is wrong just that at the moment it down i probably be crowing the virtues of the company when im long lol thats a trader
Firstly, I don't mind you making daily predictions, but you never base them on anything.
Maybe make a prediction stating that it's based on: ....currency (eg. 2 years ago ATM reported currency fluctuations was important to profitability), or TA or Aus SP or Muppet Trump and Trade Wars, or current problems at Fonterra or whatever. Just some rationale for a prediction. You might be right or wrong, but at least your thinking about it.
For what its worth, I have 50,000 of these suckers, so would like a Northward moving share price, but don't expect much until Feb 2019 when those results are released, as that gives us a clue to the Korean, Fonterra and other initiatives time to have kicked in and even then it might be too early to have had a meaningful impact.
Read posts 7582 to 7703 on 21/2/18 and remember why we are all in this together. PS am taking this opportunity to top up many more thousands as the sp drops.
I was randomly jumping pages from many moons ago and saw the above comment jump out from W69.
I have been seriously thinking about banking recent gains of my NZX stock in general, even considering going 100% cash in bank, but perhaps I'll take the above advice and give it another week or two.
Hoping for a faux bear.
Investment strategies is a separate section of this forum and is the right place to discuss varying investment strategies in my opinion.
In theory I don't see why saying you are shorting a stock is any different to someone saying they are buying a stock, which would not be considered out of place in a thread. Making up facts to get a reaction is a little different. Happy holder here, last buy in the 8 something's, never really considered the recent froth to be in the bank but I'm confident we'll get back into the teens in due course. I'm trying to keep away from tax on trading so not worrying about short term trends.
just to clarify i was not making stuff up to wind people up , people got wound up because they dont like what they heard.
the technicals show a clear rsi divergence on the weeklies in early march which anyone who cares to research is a warning sign of weakness this was followed by a macd crossover in march and death crosses as well in april on the dailies.
the hourly charts show bollinger expanding now from the consolidation and my modified 9,18 etc death crosses on the hrlies as well also the breakdown from 11.30 support adds to short term bearish.
long term still above the 200d so bullish
if you dont like my take on the technicals chart dont read it - simple
baa baa and anyone else who likes t/a at tradingview there is a big community of people who post charts on all sorts of financial instruments.
It's not an investment strategy, it's a trading strategy on ShareTrader.co.nz. The best place to discuss a trading strategy is on the company thread that the trade is being carried out on, in close to real time to give it meaning and relevance. Just because it's a short trade doesn't diminish it's value for discussion than an long trade otherwise would. Seems to me things have got a bit precious around here. I get it, that when people are holding underwater positions, it grates to have anyone that had the skills, foresight or whatever to get out or make money from it and talk about it! Some people enjoy reminding others when they bailed at the top, regardless of how low the SP eventually gets, with little thought for who might be hurting. Keeping an open mind and not marrying our shares and long investment strategies in a volatile share that has no returns to shareholders other than capital gains, could save a heap of capital and maybe even help us learn a few new tricks when there's an ill wind blowing our SP's backwards.
Rather than a ta perspective let’s focus on what 1.4 billion turnover will be for the share price FY 2019.? Giving a profit of let’s say 400 million due to increased marketing expenses......... 800-900 million in the bank. My mouth is frothing. Let’s be positive rather than focusing on the negative. I am a happy holder
Your posting adds depth, variety and content bull. I Like your transparency and shorting is just another legit play in this mkt and we all need to be a little savvy and accepting about this , just like T/A and F/A does. Shorting aint dirty, ramping can be though but thats a another subject.
Shorting may be legal but it's not a strategy I like or would participate in personally. There is plenty of dirty play going on with this stock mainly in the form of manipulation by the big boys and I guess small fry shorters just help them to achieve their purposes. Anyway I reckon ATM is a ripe takeover target, especially as the SP continues to fall, in that case even the big boys may end up with egg on their faces.
Getting a bit excited there ggcc I reckon
Firstly your $1.4 billion +52% on this year) a bit ambitious but heck we need a bit of hype around here to cheer us up eh
Even if it was $1.4 billion and they achieved the touted 30% ebitda margin npat after tax will be about $300m or an eps of eps of 40 cents
So a share price of $11 odd today still on forward looking PE of 28
My mouth isn't frothing but what the heck do I know anyway
Hope your post gets punters excited and they start buying again ...we need a bit of help eh
The thread started to get tetchy when Bull was invited to post a chart showing the TA phenomena he referred to. I have no problem with him shorting and or crowing, but if anyone makes a claim about bolly bands or topless mermaids wearing death crosses it would be good to have a chart so I know what they are talking about.
Have borrowed this(not shorted:) from another public forum, mainly UBS content posted by someone beginning with K and ending with W,Thanks.
UBS analysts remain optimistic about a2 Milk’s outlook following strong gains on China’s infant formula bestseller list, even as prices fall. According to UBS data, the company saw its first like-for-like price decline since 2016 in the second quarter. For the period, like-for-like prices fell about 5 per cent, although this could be because the company was launching a new label, resulting in clearance activity of the old label.
“We believe this was attributable to discounting ahead of the new label product launched at the end of the second quarter,” the analysts said. “Anecdotally pricing on new label product has begun to recover.”
The analysts remained optimistic about the company’s medium term outlook, but left a neutral rating on the stock ahead of a re-rate by a new covering analyst. “We continue to believe the medium term outlook for a2 Milk remains robust, with our recent visit to China reaffirming this,” the analysts said.
A2 Platinum is now is now ranked seventh as a company in online share of the top 25 formula bestsellers. While the results for the second quarter were promising, the analysts warned that overall, the price premium of imported brands in China over domestic ones appears to be narrowing and is now at about 11 per cent, compared to 50 per cent in January 2016. Still, imported brands have continued to increase their share of total online stock keeping units, now at 83 per cent, compared to 75 per cent a year ago.
“The ‘easy ride’ of multinationals might be coming to an end, with Nestlé and Danone losing momentum on bestseller lists and a2 Milk’s pricing down for the first time in two years, ahead of the new label launch,” the analysts said. “We think the market is currently not pricing in any downside risk to the long-term profitability of the multinationals in the Chinese IMF market.”
These Two paragraphs seem a little concerning. They would not be if the company was not priced at such high multiples, but because it is, anything less than perfection is going to hurt the shareprice. One good reason why buying at any price is not to be recommended however good the company may look.Quote:
Originally Posted by Joshuatree;721940
[COLOR=#353535
They are and i believe KW is out for those reasons but more importantly (for KW)the T/A.
Disclose still holding my first small parcel but havn't added atp as I planned.
Attachment 9815
When looking at T/A should start from longer time frame Weekly above notice the divergence in price to rsi often considered a warning sign of weakening trend also the overbrought level of price also considered warning sign.
Attachment 9816
daily timeframe shows the weekly divergence and also the now apparent downtrend channel that has estabilished. also of mention notice how ;onger term price has respected the 50day moving average bouncing in the past of this but recently not being able to stay above it. longer term people sometime use a 200 day moving average which price is still above.
Attachment 9817
Notice how the gap acts as support on the retest from extreme overbrought levels in may now in june it acts as resistance as well as the 50 day moving average
Attachment 9818
during june july the price was in range bollingers tighten , the last few days they stretch which often is said to start a trend. the price maybe in larger range time will tell when we retest each boundary of the lines drawn.
and lastly an intra day look below
Attachment 9819
you will notice the breakdown from range and bollingers pushing down also my what i refer to as death crosses of moving averages.
anyway this is a relative simple view of how i personally study a stock chart from longer time frame to intra day time frame and reflects one of my method of investing.
thats why i am currently talking short as short term the price is heading down as represented by the chart in the longer term who knows what will happen but as a technical analysis you react to changes in the market weather long or short.
all people are in market to make money one way or another thats why there are so many views as everyone has different methods at the end of the day if you have conviction in your method everything else is noise.
Thank you Bull. That was extremely informative.
It would be nice if some of the fundamental people on here showed there workings out on valuation , i can only remember ever seeing snoopy give his.
Ideally an all rounded investor would incorporate fundamental as well as technical analysis to form views.
Thanks Bull.Great to see your perspective and charts,keep posting these please!
Cheers bull - great post and thanks that you did show us what you see. Keep it up!
Not sure I consider myself a "fundamentalist" more a "balanced" person ... but hey - here is in a nutshell what I see from a fundamental perspective:
forward PE: (at 10.75 and based on 4 traders analyst consensus): 29; Obviously a risk if & when PE contraction starts (some say it did already);
CAGR: huge, but hard to capture given the immense jumps. Lets take 50 as backward (revenue) CAGR. EPS CAGR is still ways higher, but clearly not sustainable, i.e. in my view just describing the past.
The big issue here is that we can't really use these numbers for any future projections - given that they describe the agility of a small antelope (which ATM used to be), but not the future movements of a elephant turning into a mammoth. Elephants don't gallop ;).
FY16 growth 127%
FY17 growth 56%
FY18 growth 67%
FY19 growth (predicted): 34%
FY20 growth (predicted): 23%
Anybody noticing the trend?
Looks like the 50% CAGR is history as well. So - big question is - what would be a sensible assumption for future long term growth?
Get this number right - and your fundamental assessment will be spot on ;)
If we take the growth out of the equation, than the share would be worth something like 10 PE - $3.71; Obviously - we do have growth, so halt your flogging and take this just as a base number.
If we take Rogers modified Graham formula and assume 10% sustainable growth, than the share value would be $7.42;
Still too conservative? Make it 15% sustained growth: $9.27
And for the optimists - here is the result based on the original Graham formula and 15% growth: $14.28;
Given the huge unknowns about future market growth, competition (margins shrinking) and the science around A2 did I not bother to do a DCF. Garbage in - garbage out.
From experience - if a share is priced close to its Graham value, than there is not that much upside potential left ;) but obviously - increase the growth assumptions and the sky is the limit.
Still - if I may says so - the bears have in my view a bigger chance of winning this contest ... despite A2 being a good company.
Discl: not holding and cancelled my buy order at $9.50. Analysis is good.
All of the above is predicated upon what assumption one makes regarding the average growth rate over the next 7-10 years. I am not going to attempt to put a number on it other than to say I think this has potential that's well and truly above an average NZX50 stock. One needs to think about product expansion in regard to the tie up with Fontera and expansion of IF demand in China and elsewhere in the world. Then there's the growth in fresh milk sales.
FY19 PE of 29 seems pretty reasonable to me for this fast growing company and represents a PE premium above the NZX50 market average of only about 8 and its well worth noting that a considerable number of slower growing companies trade on similar or more elevated multiples.
I agree that short term the TA indicates that long term holders may be in for some more short term psychological challenges. This task would be made easier if shorters we're quite so overtly gleeful about the pleasure they get from their profits. Long term investors have every reason to be hopeful about the future in my opinion. Perhaps there's maybe something like another $1 downside risk from here, long term the upside potential is what I am focused on.
http://www.4-traders.com/A2-MILK-COM...ment-26937975/
Worth noting for long term holders that if the company makes its targets as per consensus 4 traders estimates for FY19 and everything looks okay for FY20 then if the stock does nothing this year in terms of its SP, (I can live with that after a ripper year last year) then this time next year it will be on a FY20 PE of just 23.
http://www.4-traders.com/A2-MILK-COM...22/financials/
For me about 10% of my portfolio in total in the ATM and Synlait "dynamic duo" feels right in terms of weathering this volatility. I might add a bit later in the year or early in 2019 if their relative SP's offer even better value either through a lower price or a situation of more EPS growth and the same price.
Just for the record:
I dont see that drawing of divergence as being correct. It is exaggerated. Strictly speaking there is only divergence when the price moves in the opposite direction to the RSI which means that line of divergence you've drawn should be much shorter and should stop at the all time price high. Sure there is some divergence at that point - but from thereon price and RSI are convergent as they both move in the same direction.
The efforts of Bull and Peter are appreciated in terms of giving some rationality to the debate and sharing their valuations/ideas/positions.
My current position is probably similar to many others on this site. I bought <$1, sold a few (too early) and the remainder are a 'free-carry'. I'm looking at long-term, and not especially worried about TA - but not in a position to add any further. Haven't traded, as scared would get caught out (as would have up until the last few months) - but bought and held.
Wrongly, I haven't really looked too hard at valuations - mainly growth rates and what that means to PE's, and also their cashflows/cash position etc. They have traditionally under-promised and over-delivered, make smart decisions, and believe there is still much in the pipeline - especially with some traction with Fonterra, developments in US, UK, Korea etc (Yuhan in Korea are definitely the real deal, and good alignment for A2). Growth is naturally going to slow as they get bigger, because hard to double in size when a billion turnover compared to being a $50m turnover. The competition is also coming, many with deep pockets - so that marketing spend does have to increase - but likely that growing competition will also grow the market and awareness of A2.
I am totally aware that there is obviously some emotion/bias/subjectivity to A2 on my part - as easily the most profitable share investment I've made and made a meaningful difference to our family's financial position. Perhaps should be paying more time/attention to valuations - but again, I think there would be definitely others here who could put there hand up on this also.....and regardless remain a believer in the A2 story.
Only charts I bother with these days are equi volume as the only thing that really matters is price and volume, and virtually all the indicators people use are just derived from price anyway. As an investor rather than short term trader I just look for the big days. Here is a Two year chart of A2 which shows very simply that only a couple of days are really important.
It is obvious that the stock is defined by whatever happened on the 21st of February while the massive box on the 22nd of Feb is a clear gamechanger, huge volume that day and a clear top which was confirmed when price fell below that box. Nothing in the last Two years comes close to the significance of those Two days. In hindsight looks like the smart money was getting out.
Attachment 9820
Ratkin, that’s a cool chart you posted
Yes does suggest that’s when the “smart money” got out
good stuff i did a 2 stage fcff valuation and got some figures like yours , depended so much on how the growth rate i attributed to stable growth made such a difference to figures spouted out. why i prefer to use both t/a and f/a as charts suppossedly contains all known info other than the short term.
Tony Alexander saying this week that their is a net short bet on the $Kiwi of about $2.7 billion by N.Z. Business's. Small business confidence hit a nine year low this week according to ANZ small business confidence survey out yesterday. Pessimism has never been worse since the very depths of the GFC in March 2009. I expect there's a very good chance that this economy is headed for extremely low growth or a recession and that the Kiwi is probably headed lower. Good thing for ATM with the vast majority of its sales overseas and not dependent on domestic demand. I think the $Kiwi will be lower and therefore margins higher than consensus analyst view. I'm also more bullish on sales estimates. I'm with Craigs and see the distinct possibility of $1.4b, consensus view is about $1.28b last time I looked. Could be even higher in $Kiwi terms if we head down to the low 60's U.S.
Interesting post I read from hotcopper
If those turnover targets are correct I would think he/she maybe correct with sp guidance.
Of course do your own research!! I just got my Fresha valley A2 milk from countdown and it tastes so much better than the other milks I have tried, It reminds me of the milk we drank when we were younger........ Not as watery as some of what we drink nowadays.
The current share price weakness is due to change in sentiment provoked by China trade war, and some analysts worried China sales are stalling.
NOW is the time to buy.
I think we will see $20 in 2020 and then move towards $40 in years to follow.
My reasons are below...
Growth in China IF will continue towards 10% and well beyond. This will be underpinned by strong MBS sales (not so much online sales)
Infant formula and milk powder sales in rest of Asia will start to build, this will be underpinned by, South Korea which will surprise, Additional South east Asia markets, such as Vietnam.
Additional product launches in China label, stage 4, pregnancy, individual sachets.
Liquid milk infant formula launched in China. Will be a huge market as flagged by Synlait. Another growth area.
USA sales will accelerate, during FY19, and accelerate further in FY20. This will be on the back of the increased marketing. Infant formula will be rolled out. This will be the next growth engine.
UK will continue to be a very small market. Infant formula will be launched.
NZ fresh milk will launch early FY19 (possibly August).
Middle East infant formula to launch in 2H19 (Fonterra)
Additional product launches from Fonterra, cheese, butter, cream. Also nutritional powders, chocolate powder protein shake, vanilla powder protein shake.
Additional growth in Australia market. Driven by substantial increased supply from synlait, and new powder products from Fonterra. Diagou sales will continue to grow.
Synlait Wakaito infant formula manufacturing plant to start production in FY19
Synlait Dunsandel long life liquid milk plant to open FY20
Fonterra site operational in FY19
New canning site purchased by A2M / Fonterra
special dividend and market buy back announced.
Based off the above growth (which will be underpinned by an approximate doubling of supply in next 2 years) I estimate the following revenues...
FY19 - 1.4 billion up 55%
FY20 - 2 billion up 40%
So as I said... $20 in 2020
Ggcc
FY21 $3 billion up 50%
So as I said $30 in 2021
And as your hotcopper friend says $40 in 2021 (that’s years after eh)
The IF volume in the USA is driven by Tenders run by individual states for food aid programmes. Only the large players have capacity to participate. A2 would need a top end niche outside that game to survive in IF there.
Don't think you can compare the two. The difference is scale-ability and hype. XRO licenses are infinitely multipliable without additional cost. A2 still needs to find cows and somehow contribute to their upkeep for every liter of milk or kg of milk solids they sell ...
I suspect most of the ST's must be on the green unlike me...My average is $11 and i was one of the late entrants to the party(sold it around $3 and bought it again).My intention is to hold it until 2020 and i am hoping A2 will make substantial progress in new markets such as Korea and the middle east.
Also has the SP drop of late is due to the repackaging of its brands and selling the existing ones at the discounted price?
Thanks BP and Bull for providing good analysis.
Tax laws in various jurisdictions are changing on a very regular basis so the need to update software to cope will be an ongoing cost. In addition to that there's a vast choice when it comes to accounting program's out there. Only time will tell how profitable XRO might be but for me that one still rates rates as highly speculative.
I'd rather own something with real earnings.
My point wasn't really comparing the two per se, but rather A2 is a highly profitable business sitting on a cash pile where as XRO to date is not ,yet it has smashed it in terms of SP. Lets not forget that XRO went from $45 down to $12 on route to $50, maybe there is a similarity between the two in this respect.
A2 milk under the A2 milk company / Anchor brand is at pack and save for $6.29 now. Very pricy! Will be interesting to see how it sells and if we'll see some marketing spend here.
Anyone noticed it at Countdown or anywhere else?
Pricing compares very well with organic milk.
I don’t think it’s too expensive if you believe in the health benefits. Lactose free milk is more expensive than that. $4 a litre I think.
So is it branded anchor/A2?
I found some images from another forum.
Attachment 9822
Attachment 9823
Interesting... I hadn't thought much about the fact anchor was doing their bottling/distribution and how that may lead to co-branding. It certainly looks more professional than Fresh Valley.
Fonterra have dismissed A2 for years... now they have A2 branded product, what if its really successful? who wins?
Couldn't resist buying more at $10.50
Fresha Valley is similarly priced in Countdown Auckland. $1.39 for great looking packaging tells me I was in the wrong business. Being a big milk/porridge person I have found the thickness one can get in the throat from milk has all but disappeared after using A2 milk (it might have other benefits with the professional packaging:)).