A2M (ASX) Chart Update

Originally posted by saml182 ↑

Originally posted by asb83
Good to see someone with a more balanced point of view. It's currently trading on a FY19 PE of above 30. So at current levels, you're already buying the next 3 FY's worth of growth (based on analyst estimates and sector average) and only buying growth beyond that.

Fair enough if you're buying now with the view to hold for the long term (i.e. 3+ years), however, anyone buying now thinking there's easy money to be made in the next 6-12 months is not considering the risks. Just like Prosperity buying a few months ago and then kicking and screaming ever since because they didn't take into account any risk and thought it was a shoo-in to make money off.
I would agree that PE of 30 is high, I hold an private wholesale investment with PE of 1.5 and comparatively speaking A2M seems ridiculous.
However my private business does not have a earning growth of 100% a year, this made the PE of 30 very cheap.
Peter Lynch used to buy stock with a 25% YoY EPS growth at approx PE<25. His theory is that a PE 25 company with consistent 25% YoY growth would mean the PE after your Year 0 purchase would be:
Y0: 25
Y1: 20
Y2: 16
Y3: 12.8
Y4: 10.24
Y5: 8.192
Y6: 6.533

A2M if EPS growth is maintained at 50% (Assuming half of the FY17/18 growth at 106%)
FY19: 30
FY20: 20
FY21: 13.33
FY22: 8.88
FY23: 5.93

Earning growth if consistently delivered, will drive drastic reduction in PE. It'd be a bit late to buy into growth stock that had reached the behemoth size which growth is restrained by MC, like Nestle and Danone. Late comer will see themselve stuck with a High PE stock that has single digit earning growth. The only benefit those companies offers are stability and above inflation rate dividend at the company's discretion.

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Based on the S&P falls and the A2M bearish resistance levels at just sub $10, might be an interesting trading pattern and chart for A2M 2morrow.

Worth plotting companies with American citizens as CEO as A2M has with others on the NZX and ASX and seeing whether they have a decrement compared with companies with Australians, Kiwis, Asian and European national executives as the Huawei incident has had a severe effect on American exec companies such as RDS compared with European exec ones.

No.	Vol.	Price($)
1	4019	$10.38

No.

Vol.

Price($)

4019

$10.38

Price($)	Vol.	No.
$10.39	63456	7

Price($)

Vol.

No.

$10.39

63456

(20min delay) Trade with IG
Last $10.39		Change 0.18(1.76%)		Mkt cap $7.502B

Open	High	Low	Value	Volume
$10.20	$10.43	$10.13	$29.54M	2.864M

(live)
Last $10.39		Change 0.18 ( 1.55 %)
Open	High	Low	Volume
$10.22	$10.43	$10.13	299352
Last updated 15.59pm 12/12/2018 (live) ?

Based on the S&P falls and the A2M bearish resistance levels at...

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