A2M 2.44% $5.99 the a2 milk company limited

The long term outlook for the company is very strong, they have...

  1. 356 Posts.
    The long term outlook for the company is very strong, they have very good well motivated management, good growth potential in most of their markets. and following the recent capital raise should not require another, all looks bright and rosy for A2M. I’ve held that view since I first invested in 2012.

    Although, no matter how exceptional a company is, and how much potential it has, it can still be overvalued from time to time, just as it can be undervalued.

    Djenrod, few disagree about the positives on this thread, even though many do seem to brush aside or avoid the risks.

    When A2M sit down and put a year ahead plan in place I have good confidence that they have factored in many things, planned price point increases in Australia if indeed not just rumour, the pending price point normalisation in China, the agreed rate of a2 farm conversion by Synlait, forward production targets, forex as best they can, the lower than previously planned up take of stores in Northern California, etc, etc

    All of that market analysis will have been already built into the 2016 A2M plan and associated guidance, and A2M have provided a guidance range to cover the uncertainties that they have realised within that plan.

    That revenue guidance range is NZ$300M to NZ$315M.

    If you assess margins, forward free cashflows and run the models, you may find that A2M would need to outperform that guidance by close to 100% to justify a present valuation of $3, quite unrealistic really.

    Keep it real folks, no one likes to see enthusiastic kids getting led astray.

    Sentiment, hope and hype is not the same as value.
 
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