Low on stock in China? Does this mean production is low or sales are high? Hopefully the latter
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There have been reports of an Asian food shortage for years, due to growing population.
The a2 Milk Company (ATM) Another Tick for the Formula
20 NOV 2019
The a2 Milk Company (ATM)’s Annual Meeting was positive — with first time 1H20 guidance confirming strong revenue momentum, particularly in Infant Formula (IF), and upgraded FY20 margin guidance. Highlights were (1) a further broadening in sales channels in China; (2) signs of success in extending customer tenure and (3) gross margin momentum. Despite a share price reaction ahead of our earnings upgrades, we continue to view risk/reward as positive. Valuation metrics (EV/EBIT 16x, PE 23x adjusted for US losses/cash) are attractive vs peers, history and the market, particularly given ATM’s strong free cashflow and growth outlook.
We are attracted to the opportunity for ATM in existing markets in addition to new markets and products — with ATM currently only scratching the surface of a material market opportunity. Valuation outcomes are wide, but in our view current valuation metrics offer a favourable risk/reward, particularly when adjusted for loss-making markets. OUTPERFORM.
Did the same at 70c hoping it would come back to 45c to 50c a few years back and it went to $2.....bought back in and sold about $2.60ish....but didn't come back and then had to buy back in at $7 and have kept them. Still got one original block bought at 50c 4 years ago. I have a good system to get your tax down, put into action Feb last year.
You mean the old divvy strip then sell for a loss system?
a2m is knocking on $15s door.. knock knock knock let me in.