I have said this over n over for months the biggest threat to these dairy stocks is chinese regulation changes
Not sure people are understanding how business in China works
The more succesful a foriegn comany is the more the local business community demands more change to make it harder for that foriegn company
This is not new it's been going on for a very long time anyone remember fosters foray into China
Forget the FTA the chinese do not abide by contracts ask Mount Gibson Iron about that or many Australian miners completely screwed over in 2008
Ships turned back signed contracts ignored
They care nothing for bona fide trade agreements an will ratchet up compliance costs at will
A2 is a great business so is A2 BKL BAL VIT BGA MGC
We have seen several Coys hiccuping in China why would A2 be immune if the chinese decide at a whim to add more regulatory change
Who knows A2 may be the one that cracks it I can tell you from doing business in China the more popular your product the more the local business community screams foul
It's not about how great your product is its about how the local chinese business people see you as a threat to market share
It's niot about what's popular with the consumer or what's in demand it's the changes they make to blindside company profits as we are now seeing is biting
You can say all day oh A2 is better run than BAL BKL VIT BWX BGA MGC maybe it is but that's not the point
Do not put all your eggs in A/2 is What I am saying as these left Field blind sides will only get worse the more succesful
The sales are
Not many local business people in China will welcome foriegn COYS with open arms
I would be extremely cautious an if your in great profit remember these words
We look after chinese first we are family no obligation to you !
I think shorts will really drive these storys to China down next week BAL especially
I like A2 best of them with there global plan seems much more diversified and the milk is gaining market share here domestically
Saying all that il be looking for entry's in the 1.70-180 range in coming weeks for a trade it could get there now after yesterday
As an investment I think yesterday casts very big shadows on that concept not because of A2 great company because of the Chinese
Tread carefully folks take the lessons of BAL BGA VIT BWX MGC an learn from them
Shorts were buying big lots yesterday by Late next week I expect the shorts to increase
Do not trust China
A2M Price at posting:
$2.21 Sentiment: Hold Disclosure: Held
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