A2 Milk Company Ltd (ASX: A2M) shares have emerged among the top 10 most popular traded stocks of Saxo Capital Markets’ Australian clients in August.
What did Saxo say about the A2 Milk share price?
A2 Milk managed to slide into number 10 on Saxo’s most popular stocks list, trailing behind household names such as Pilbara Minerals Ltd (ASX: PLS), Zip Co Ltd (ASX: Z1P) and Qantas Airways Ltd (ASX: QAN).
Saxo commented that:
The A2 Milk Company also made it in our list of the ten hottest stocks among our retail traders last month. The infant formula giant, which was once one of the favourites among the bulls, has lost its sparkle. The firm published its FY21 results towards the end of August, with revenue plunging over 30% to just AU$1.21bn.
Saxo analysts added:
Revenues fell most significantly throughout Australia and New Zealand, earnings 42% down year-on-year at AU$559.7m, which remains its biggest market. The stock’s increasingly bearish sentiment was compounded by a 77.6% fall in EBITDA to just AU$123m.
Popular, but for the wrong reasons
A2 Milk experienced heightened levels of trading activity following the release of its FY21 results.
On 26 August, the A2 Milk share price plunged 11.8% to $6.05 with ~27.5 million shares changing hands.
The next day, it would fall another 2.64% to $5.89 with volume of ~15.7 million shares.
To add some perspective, its current 10-day average volume is approximately 8 million.
Looking at A2 Milk’s volume profile, the company’s shares might have landed on Saxo’s top 10 list for the wrong reasons. Investors might have opted to sell their shares in August following yet another weak financial result.
What’s next for A2 Milk?
A2 Milk’s near-term outlook doesn’t appear to be so bright according to its results commentary.
The company has observed that the Chinese infant nutrition market was “materially impacted by a lower birth rate, especially recently due to COVID-19 and related vaccination programmes causing many people to delay pregnancy”.
Competition in the Chinese market has also been intensifying, with A2 Milk citing that “market share gains by domestic brands compared to international brands are expected to continue”.
The post Why the A2 Milk (ASX:A2M) share price has this leading broker’s Aussie clients scrambling appeared first on The Motley Fool Australia.
Should you invest $1,000 in A2 Milk right now?
Before you consider A2 Milk, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and A2 Milk wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
More reading
- Leading broker reveals why these 10 big-name shares have been firing up its clients
- Leading brokers name 3 ASX shares to sell today
- Here’s why the A2 Milk (ASX:A2M) share price is down 6% in a month
- Why the A2 Milk (ASX:A2M) share price is souring again today
- ASX quarterly rebalance: A2 Milk dumped from ASX 50, Nuix kicked out of ASX 200
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/3DYgC3x
Leave a Reply