If you’re thinking about buying ATM shares right now, beware.
While ATM shares may seem attractive based on a price to earnings view, there are some disparaging signs that make them less attractive. Specifically today’s data from Stats NZ showing that “New Zealand’s biggest goods export, dairy products, fell $377m (19 percent) in December 2020, compared with the same month in 2019”.
I’m not saying that this makes ATM a bad buy, just that anyone considering buying ATM shares should consider this in their analysis.
It’s important to note that I’ve not done any analysis on whether ATM is a buy right now, because as previously mentioned in my other articles, I plan to retire soon and need to invest in stocks that pay dividends now, not in 10 years time (though it may transpire that I will have room in my portfolio for such a stock next year, depending on how things go).
If I were to do any analysis, I would be modelling results based on MBS and CBEC growth with recent evidence considered, then if that was unfavourable (or if I was managing a portfolio with a risky element and looking for higher gain), I would model how the price would look post-COVID. This model would be a DCF style analysis and would have a significant risk premium in consideration.