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A2M - The A2 Milk Company

Discussion in 'Stocks 0-H' started by System, Mar 31, 2015.

  1. System

    System Administrator

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    The a2 Milk Company™ is building a global business based on a differentiated, premium and branded portfolio of dairy and infant formula products supported by an integrated portfolio of intellectual property and a developing body of scientific evidence.

    http://thea2milkcompany.com
     
  2. VSntchr

    VSntchr

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    The code certainly made me do a double-take :eek:
    Looks like numbers are the new trend for ASX companies...
     
  3. So_Cynical

    So_Cynical The Contrarian Averager

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    300+ million MC with revenue of around 100 million...like so many of these new stocks, trading with lots of expectation built into the price.
     
  4. herzy

    herzy

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    Hahahahaha gold.

    I suppose that ticker could have been assigned a more appropriate company. Alas...
     
  5. skc

    skc Goldmember

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    A2M is not a new IPO. It's just being dual listed here and has been on the NZX for some time.

    Doesn't change the fact that PE is a bit high though.
     
  6. So_Cynical

    So_Cynical The Contrarian Averager

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    Yes i looked at the NZX last night, thats where i got the numbers from...just saying that like a few other stocks, NAN, AKP, XRO, 1PG and im sure there are others, a lot of expectation has been priced in, 100's of millions of dollars worth of expectation.

    Similar to GDY and CFU and a heap of other fallen stars.
     
  7. Sdajii

    Sdajii Sdaji

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    I am a naive, sheltered, prudish fella who had to google A2M to see what you were on about. Strange choice of name indeed! Especially for a 'milk' company...

    Am I misreading you? A revenue of $100 million and a market cap of $300 million sounds insanely underpriced, unless that's not P/A or it's gross revenue with a small margin.
     
  8. So_Cynical

    So_Cynical The Contrarian Averager

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    Ahh yes i see what you mean, will have to double check tomorrow...just had a 15 minute look at them yesterday.
     
  9. skc

    skc Goldmember

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    http://en.wikipedia.org/wiki/A2_milk

    $100m is REVENUE. Without knowing the margin it's not indicative of whether it's over or underpriced.

    For 2013, A2M recorded $94m revenue, $4.12m profit after tax with $20.2m cash on hand... according to company's annual report (in $NZ). So $300m market cap is probably a bit on the high side but growth was 48% that year. It's not unrealistic to see NPAT reaching $12-15m in a few years if the growth path continues, thereby justifying the current valuation.

    Obviously a few things need to be right... like whether A2 Milk is actually better for you.
     
  10. Sdajii

    Sdajii Sdaji

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    Yeah, I know what A2 milk is, but A2M is still a funny choice of name, given the alternate meaning.

    As I said, 'revenue' can be net or gross, and if that's not specified, a 'revenue' figure can't be used to calculate much.

    Less than a 5% margin on an agricultural product sounds pretty slim and risky to me, but it makes more sense in relation to the market cap. Thanks for the figures. Obviously if they're still growing and developing that could change a lot.

    Call me cynical, but this wanky trend of designer modern foods is crazy. I doubt there are health benefits associated with A2 milk over regular milk (except perhaps in an extraordinarily few people with allergies). Of course, all these ridiculous modern trendy foods may still be highly popular and lucrative, given the tendency of ridiculous modern western culture with a huge appetite for BS. People marvel over the quest to discover the secret of the Japanese diet giving them the world's highest longevity (duh! Lots of fish, low consumption of red meat, minimal food processing, and when they do eat meat they don't kid themselves into thinking the fat is bad, they love fatty cuts - keeping your calories low is important, cutting out fat is irrelevant for weight and deleterious for health). They miss the obvious and then have a quest for fat free sugar lollies and designer milk. But, stupid as it is, the market is there. Short to medium term it might do well, but in the long/very long term I think A2 milk will become a forgotten fad (of course, the company may well adapt over time and venture into other products, perhaps whatever is the new fad food down the track).
    small portions and a low tendency to overeat, ye
     
  11. skc

    skc Goldmember

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    I had to look up what that means... boy. That is a terrible choice. I can only assume that the good people at A2 Milk and the ASX have no idea that's what they've done. Perhaps there'd be a code change request down the track. I know I would.
     
  12. Sdajii

    Sdajii Sdaji

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    I had to google it too being the naive little boy I am, but I would have thought someone with your name would be well familiar with it :p
     
  13. So_Cynical

    So_Cynical The Contrarian Averager

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    Its Milk, and thats what i kinda meant with the MC and revenue numbers, milk is a low margin product...im reasonably confident that there is evidence that many people (lactose intolerant etc) can benefit from consumption of A2 Milk.

    -----

    A2M - Jesus H Christ get your minds out of the gutter. :)
     
  14. skc

    skc Goldmember

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    Why? What does my name mean?
     
  15. Sdajii

    Sdajii Sdaji

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    After some brief googling I'm reasonably confident that there is no scientific evidence that A2 milk has any health benefit for anyone. The sort of mentality which would lead someone to think that the absence of a protein would be of benefit to people with an allergy to a type of sugar (lactose) is the sort of mentality which gives these myths credibility and makes them lucrative. But baseless as they may be, lucrative they sometimes are. Just looking at the gluten myth! That one actually does have an incredibly small percentage of the population who benefit from it, but a whole mass of people spend an incredible amount of money believing it is relevant to them.

    SKC: I might have you mixed up with someone else, but someone on an investment forum (I thought it was this one) had the username SKC and had captions and stuff referring to themself as sexy kinky chick. Maybe it was a different person on a different forum.
     
  16. skc

    skc Goldmember

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    What the... :confused:

    You are NOT a naive little boy!
     
  17. Sdajii

    Sdajii Sdaji

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    Terribly sorry, it was obviously a different person on a different investment forum, with a coincidentally similar name (with a different meaning, clearly!).

    Call me naive or not, but I had no idea what A2M meant until I saw someone pointing it out in this thread, and had to google it.

    Speaking of googling, I've done a bit more reading up about A2 milk. I was trained and worked as a geneticist for some years, I have studied chemistry and nutrition, and I have no doubt that A2 milk is nothing more than a gimmick. It is just a mutant form of the A1 protein (it's a little bit like having a bowl of fruit salad and switching places between one blueberry and one raspberry). The studies showing that A1 protein (the type without the more recent A2 mutation) were harmful were funded by the A2 companies, and involved injecting the A1 protein directly into the body, even directly into the nervous system of animals! Do that with any food and you're likely to end up with problems. Obviously I wouldn't recommending injecting A1 (or A2, or substance at all) into your body, but consuming it through your mouth is no different from A2.

    A2 milk companies have already gone to court and plead guilty to charges of illegally presenting 'information'. I'd be pretty wary about investing in this or any A2 milk company, and would personally consider it highly unethical.

    This also may be of interest: A1 and A2 milk are both common in various breeds of cattle all over the world, and in some areas A2 just happens to be common by accident. No one noticed or cared until people started testing for it. It would be quite easy to convert the entire dairy industry of the entire planet to A2, and if there actually was any benefit, that's exactly what would happen.
     
  18. skc

    skc Goldmember

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    OK.... one of these guys are dirty then :)

    Interesting. I suppose when it comes to marketing, perception is fact sometimes...
     
  19. skyQuake

    skyQuake

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    Completely agree. I had some leisure time and read up on some scholarly articles (even the ones funded by A2).

    In short, quoting the EFSA (European FDA)

    .....


    Having said that, the average consumer would not be so discerning: Look at what happened with the 'Permeate free' tussle.
    All it takes is a smart ad campaign to list some of the dubious health benefits and shoppers will mindlessly switch.

    Heck, while I was scrolling through the website with a sneer on my face, I stumbled upon 'gentle on stomachs'.
    And immediately thought about my occasional stomach-aches after drinking regular milk. Maybe I should try some of this great new innovative product. Right?

    Placebo effect will take care of the rest :)

    Happy Easter all!
     
  20. So_Cynical

    So_Cynical The Contrarian Averager

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    Where is the like button.

    ---------------------

    WOW, ok i thought that Jersey cattle were all A2..i will have to do some more digging over the weekend.

    ---------------------

    Without digging im assuming that the EFDA would support the EU dairy industry (status quo) worth a couple of billion annually? - would it not?
     
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