The guys at Sequoia Fund recently released a letter about some of their new investments. Among them, there was a milk company based in New Zealand named "A2 Milk".
It's fucking ironic talking about that stock on that blog because I recently realized that the cancer I thought I had is probably an intolerance to lactose. Isn't it funny?
Actually, no, it's not funny at all. Because all of my life, I've been a big big fan of dairy products, like yogurt, ice cream and milk. And now, these products which I've cherished for almost 4 decades, give me cramps which I always associate to cancer even if I know I don't have that disease.
I've thought for some time that my life was more and more boring, but now, with that restriction for dairy products, my life is not just boring, it's fucking sad. But well, there's pills for that. I'll probably try them and be once again that good old jovialist Penetrator.
So, what about that A2 Milk stock?
The company claims that milk with A1 protein is harmful. I don't know shit about that A1 protein. Is that in the milk I used to drink? I don't know. I don't even care. But that's why that company produce milk with the A2 protein. The problem is that research doesn't corroborate that affirmation. So, it's not obvious that this miracle product is magic. I like when research goes along with a revolutionnary product. Otherwise, it looks just like a fucking scam.
However, the numbers are very interesting.
Market Cap: 6,6B
Current ROE: 49
Average ROE last 5 years: 39
Annual sales growth last 5 years: 58%
Annual EPS growth last 5 years: 109%
Current PE ratio: 40
Forward PE ratio: 20
Given these numbers, it looks like a great company. The problem is that they may surf on some hype which isn't scientific at all. Like all that fucking new age shit about energies in rocks or in light. Or eating grass and pumpkin seeds. Don't remember that about 25 years ago, some people even drank their piss as a therapy. It's not a fucking joke. It's true. We should always remember that when talking about some revolutionnary food or drink.
Anyway, that's exactly the kind of stock in which I'd invest maybe 1 or 2% of my portfolio, but definitely not more. But I'd go with A2 Milk long before any of those stocks which don't make money or very little money.
Sequoia does not mind putting 1 or 2% of their portfolio in risky stocks. One of their new holdings just got listed on the stock market in October of last year. They are called Guardant Health and they claim to have blood tests and diagnostic techniques that can catch things like lung cancer very early and defeat cancers that usually end you. I usually think stuff like this is too good to be true. I am not an investor. But if anybody wants to research this opportunity, here's a presentation from the company courtesy of seeking alpha:RépondreSupprimer
Health stocks, as promising as they may look, are never really safe. They're too linked with politics, approvals, patents expirations... Everything can change very quickly.RépondreSupprimer