BFC3540 Stock Debates – Week 2 – A2M & TWE

Anddd we’re back for week 2 of the stock debates. Exciting times as things start to heat up in the stock market. But before you keep reading, please don’t forget to like, comment and subscribe. Or just like our Facebook page to keep up to date with the latest UNIT posts and events.

The ASX200 finished up 0.9% this week, continuing the upwards trend of this month which sits at 3.8%.

asx200week2

Also, there was some HUGE news this week. A2’s competitor Bellamy’s received a takeover offer at a 50% premium, sending their share price off the chartzz.

bellamy'sweek2

This had a small positive effect on the share price of A2 as well – the analogy here is that your neighbor just got an off-market offer for the home at a massive premium. This would influence your perception of how your house is valued.

a2week2

So thanks to their neighbor, they got a little boost. However, it still looks a bit grim for A2 – their share price is still struggling to recover from their financial report release, big sad. The negative sentiment is still lingering, which means that it will take a while for the share price to make a proper recovery.

With that being said, A2 is still a strong growing company with a great product. Its growth throughout the ANZ and Asia regions is significant; refocusing its business away from the UK will also ensure the continued growth of these regions. While the stock price might face some short-term headwinds, I am confident that it will make a recovery in the long term.

However, for the sake of this stock debate, A2 is sitting on the fence and I would avoid both a short and long position.

Treasury Wine Estates finished the week up at 6.9%, also continuing the upwards trend this month, suggesting a strong correlation to the ASX200 and the overall performance of the market.

tweweek2

It’s more correlated with the general market at the moment, with production across the board increasing by 17%.

TWE annual report 2

Current recommendation is to long but be wary of the news, as it’s in a position susceptible to changes.

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