Too Much Regulatory Risk ?

I wouldn’t have thought regulatory risk should be the sole reason for Geoff Wilson to have sold last week, or perhaps under their perception, the risks are increasing at a time when the share price is fully valued, just simply tipping the risk/reward scales.

http://www.copyright link/news/worl...mer-stocks-blackmores-a2-milk-20160224-gn2xfp

Around 50% of A2M’s revenues are now dependent on a presently legal but uncontrolled Australian grey market, noting that it's now been made an illegal black market trade in both New Zealand and Hong Kong.

That’s quite a risk to carry for any company with a billion dollar market cap, and one may at least wonder if the A2M Directors are becoming really a little twitchy given the increasing risk exposure.

It may be that A2M hold on IF expansion once the capacity at Synlait has been fully taken up, until such time as the UK and US markets start to take off providing a bit more diversification. Still, equally, A2M could just let it run, on a boom and potentially a bust basis.

I guess for investors, it becomes a matter of how far up the risk/reward curve one wishes to be, as individuals some can tolerate a higher risk/reward position than others, clearly though it was too high already for Geoff Wilson last week, and there are presently very few other fund managers with substantial holdings in A2M.