A2M - The A2 Milk Company

[Skate]

G'day all, I am new to Aussie Forum.

@makteb welcome to the ASF community, new members always have an interesting story to tell from their unique perspective & it evident with 15 years under your belt you would have a few.

Ed Seykota once said
“There are old traders and there are bold traders, but there are very few old, bold traders.” so I'm guessing you fall into the latter.

Just as a refresher
Use the search feature if looking for specific information but in the meantime check out the "Dump it here" thread - a thread dedicated in the hope of helping others in their journey. If you want to pass on some information you have found helpful feel free to make a post. Have a read of a few posts, the first post can be found here - https://www.aussiestockforums.com/posts/1005967/

What's a "Dalmador"
If you are curious what a "Dalmador Trading Strategy" is, it can be found here - https://www.aussiestockforums.com/posts/1069564/ There are a multitude of posts from member that are an interesting read littered throughout the thread.

Check out the "Dump it here" thread
Is this a blatant plug for you to have a read of the "Dump it here" thread - YOU BET IT IS..

Welcome aboard, thanks for joining the best "Stock Forum" on the planet.

Skate.

 

[makteb]

I sold out of A2M on the 20th as it came off it's high.
When I saw the report (above) I thought I had stuffed up and jumped too early.

I have been waiting for a cross above $19.00 to re-enter but I think at the moment anyway that I may have just been lucky to escape.
Just waiting now for it's next move ??

View attachment 102567

Options on this asset has been fruitful from my experience.
Recently sold a $19.50 call.

Have you considered a covered call as an exit strategy?

 

[bigdog]

ASX announcment "Updated FY21 Outlook" has been uploaded below

ATM A2 Milk New Zealand share price is currently down 11%

A2M announced today it has started to observe emerging disruption to the corporate daigou/reseller channel, particularly during the Stage 4 lockdown in Victoria.

As a result of this and previously highlighted issues relating to pantry destocking following panic buying during the height of the pandemic, management advised that it is witnessing a contraction in the daigou channel beyond its previous expectations. It is also not seeing the replenishment orders that would typically be anticipated at this point.

Unfortunately, this weakness is expected to persist during the remainder of the first half.

Management commented: “This disruption in the daigou channel is impacting our September sales and it is currently anticipated that this will continue for the remainder of the first half of FY21. Sales in the daigou channel represent a significant proportion of infant formula sales in our Australia & New Zealand (ANZ) business and, as such, we now expect ANZ revenue to be materially below plan for the first half.”

 

[peter2]

Not surprising considering there's no international travel. Daigou supply channel has been cut off by COVID border closures.

Daigou suppliers must develop online supply chain but this is more easily monitored by customs and the ATO.

 

[Trav.]

A2M taking a beating today. Down +20% due to revise guidance.

 

[barney]

A2M taking a beating today. Down +20% due to revise guidance.

Hey Trav ....I hope you don't still hold this

A2M is not a Stock I would look at most of the time, but I quickly ran a visual time line through their Announcements relative to their Share Price.

I don't know who management are or their history, but I would be inclined not to trust their motives 100% of the time!

Why?

They were still spruiking the brilliance of the Company results in a FY20 results presentation on 19th August, then the same rehash of brilliance on 9th September in an Investor Presentation no less

Then they admit things are tough on 28th September but tell everyone that group revenue is still expected to rise on all fronts and EBITDA for 2021 will be about 31%

As late as the AGM 2020 Presentation on 18th November they are still trying to brush over the problems with the same old rehash of results etc etc.

MEANWHILE, the SP has been continually eroded/decimated while everything is going not so bad!

Todays updated Y21 guidance sees the SP smashed yet again ...... yet the Company guidance still looks "reasonable"

FY21 guidance as follows:
• Group revenue for FY21 of $1.40 billion to $1.55 billion
• Group EBITDA margin for FY21 of between 26 per cent and 29 per cent.

I might be sounding a bit cynical, but I hate seeing regular punters having the wool pulled over their eyes while those in the know/deep pockets are cleaning up/dodging bullets at average Joe's expense.

Anyway, given how the Stock market operates, A2M is a Buy today ... a Sell on Monday's Open, then a Buy/Hold at $8.95 (January sometime?) after all the shenanigan's are finished ... The circus can then re-start

No wonder I like Specs, Lol.

 

[Trav.]

Hey Trav ....I hope you don't still hold this

No mate, not holding, but I did jump in for a quick trade today. Made some beer money for the weekend ?

I think that you are right about this, but will just watch the show.

Buy/Hold at $8.95 (January sometime?) after all the shenanigan's are finished

 

[barney]

No mate, not holding, but I did jump in for a quick trade today. Made some beer money for the weekend ? I think that you are right about this, but will just watch the show.

Good stuff ... Glad you earned a few bob and didn't get stung with that drop ... bit scary when they do that.

No doubt A2M will be back probably bigger and better down the track but it seemed management were wrapping the real truth in cotton wool when they surely knew things were no where near as good in the short term.

All good M8 ... enjoy those couple of beers! (That' me not you, lol)

 

[Smurf1976]

No doubt A2M will be back probably bigger and better down the track but it seemed management were wrapping the real truth in cotton wool when they surely knew things were no where near as good in the short term.

I see that Synlait (ASX = SM1) have placed their own company's shares into a trading halt whilst SM1 management assesses the situation regarding A2M.

A2M is stated as being a "strategic customer" of Synlait hence the link between the two.

I interpret that to mean management of SM1 considers that the issues with A2M at least possibly extend deeper. Just an assumption in my part there but the A2M share price of itself shouldn't be that much of an issue, SM1 would presumably be more worried about there being an ongoing business.

https://cdn-api.markitdigital.com/apiman-gateway/CommSec/commsec-node-api/1.0/event/document/1410-02323714-225MC0MRB80N90C5AVO1MHG64U/pdf?access_token=Ky0Qw0eCsvZAyWViTbtRPGFUwJad

 

[galumay]

It took a long time to play out, but it was always coming. When a commodity trader gets hyped due to clever marketing & a healthy dose of BS its usually a fairly short lifecycle. This one lasted longer in the bubble market. Well done to the momentum traders that made a motzer while it was on!

 

[Miner]

No mate, not holding, but I did jump in for a quick trade today. Made some beer money for the weekend ?

I think that you are right about this, but will just watch the show.

Not long ago A2M fell through in August. Check out @bigdog 's posting. DNH

 

[Miner]

It took a long time to play out, but it was always coming. When a commodity trader gets hyped due to clever marketing & a healthy dose of BS its usually a fairly short lifecycle. This one lasted longer in the bubble market. Well done to the momentum traders that made a motzer while it was on!

good one. I bought at $2 around and sold out around $3.50 or so thinking that was too much . Now like APT and KGN, A2 M gone up and up.
Strangely SM1 did not collapse after opening from trading halt.

 

[peter2]

Today's (27/1/21) above average volume bullish bar is interesting. Especially as it occurred on a market down day. If I was a short term trader I'd be tempted to have a go at A2M. Tomorrow's price action will confirm today's bullish demand or cancel it.

Due to report Feb 25. Plenty of time for a "quickie".

Edit: Also interesting, noticed that SM1, BGA and BUB opened higher today (hmm dairy).

 

[Miner]

Today's (27/1/21) above average volume bullish bar is interesting. Especially as it occurred on a market down day. If I was a short term trader I'd be tempted to have a go at A2M. Tomorrow's price action will confirm today's bullish demand or cancel it.

View attachment 119135 Due to report Feb 25. Plenty of time for a "quickie".

Edit: Also interesting, noticed that SM1, BGA and BUB opened higher today (hmm dairy).

After reading your post I visited announcements.
Found SM1 increased milk price.
Long shot, if there could be some change in milk pricing?
As such A2M 2 litre milk cost $5.6 against Browne's @$2.65.
But there are other low shelf milk @$5 / 1.5 litres too.

 

[Miner]

Today's (27/1/21) above average volume bullish bar is interesting. Especially as it occurred on a market down day. If I was a short term trader I'd be tempted to have a go at A2M. Tomorrow's price action will confirm today's bullish demand or cancel it.

View attachment 119135 Due to report Feb 25. Plenty of time for a "quickie".

Edit: Also interesting, noticed that SM1, BGA and BUB opened higher today (hmm dairy).

A2 projection is interesting but not encouraging to put money there. Please expand the embeded image and see what they have projected for near future. giving opportunity to invest ?

 

[Dona Ferentes]

While our performance in the competitive “11/11″ online sales event showed year-on-year growth with higher promotional activity, sales in the period following that event were below expectations with subdued pricing,” the company said. Also "unprecedented levels of uncertainty and volatility” continuing due to COVID-19.

and down. Third gap down

 

[galumay]

It was always going to be a problem for an undifferentiated commodity trader. I know I have banged on about this in the past, and I think I swore off commenting in the thread, but I can't help myself.

Hopefully those who were invested have banked their profits.

 

[peter2]

Whatever problems A2M has, haven't got better. The third gap down is a huge red flag for me and A2M is in the "never to be traded" category. The recent reversal setup didn't trigger and today's gap down puts it in the same group as AGL.

It must really annoy mgt that they've got a huge market in China but can't get their product to them. When will mgt realise that their inability to get their product into China is the real problem not Covid.

 

[Miner]

Whatever problems A2M has, haven't got better. The third gap down is a huge red flag for me and A2M is in the "never to be traded" category. The recent reversal setup didn't trigger and today's gap down puts it in the same group as AGL.

It must really annoy mgt that they've got a huge market in China but can't get their product to them. When will mgt realise that their inability to get their product into China is the real problem not Covid.

How SM1 will be reflected with the poor performance of A2M will be shown in a week's time

 

[loverat]

Hi guys

I am a total newb. My husband came home with a "hot tip" from some guy at work saying that now is a good time to buy some A2M stocks. Neither of us have ever bought stock so I thought this would be a good place to check/learn.

Just by reading the recent comments it's looks to me this "hot tip" guy might be more about hopium than anything else. My view is just because he does trade doesn't mean he is on the right track. Can someone please expand on why they can't get their product into China because this guy is spouting the "it's all because of Covid line".

Also, would anyone have a recommendation for a decent starter broker? I will research but I don't know where to even start as somewhere where newbs can go and not get shafted - it's a jungle out there! He said the guy recommended the Comm bank one - but I hear Comm Bank and immediately think really? those buggers?

Thanks - appreciate any advice if you have the time.