A2M share price in focus
Founded in New Zealand in 2000, The a2 Milk Company is involved with the sale of products sold under the a2 brand which contain the naturally occurring A2 protein type.
The company is not responsible for producing any of its products itself. It has access to over 25 certified dairy farms across Australia where its suppliers handle the production process. Additionally, its instant formula products are produced by its supply partner Synlait Milk in New Zealand.
There are various claimed health benefits of a2 Milk, the main one being that it’s easier to digest than ‘normal’ milk, so some people that normally have trouble with milk can stomach it a bit better.
While it may be large, A2 Milk Company Ltd is a growth stock, and so it requires a different set of rules and may not be simple to value at times. Studies have shown that over 5-10+ years, it’s top-line revenue growth which explains a stock’s performance. That’s why it’s good to see A2 Milk Company Ltd is able to grow revenue at 11.6%, a good clip.
HUB shares
HUB24 was founded in 2007 and has quickly become a leading player in the wealth management industry, providing software and management platforms that touch financial advice, superannuation, and investment management.
HUB24’s three main products are the platforms HUB24, Class, and myprosperity. HUB24 is made for financial advisers and their clients, providing access to a range of managed funds and investment products. Class is a leading software for self-managed super funds to manage portfolios, legal documentation, and compliance. myprosperity is a provider of client portals for accountants and advisers to provide an enhanced service and customer experience.
HUB24’s competitive advantage is in the quality of its service. In 2024 they’ve been awarded Overall Best Platform in the Adviser Ratings Financial Advice Landscape Report, and ranked first for Overall Satisfaction and Brand Image and Reputation in the 2024 Wealth Insights Platform Service Level Report.
A2M share price valuation
As a growth company, one way to put a rough forecast on the A2M share price could be to compare its price-to-sales multiple over time. Currently, A2 Milk Company Ltd shares have a price-sales ratio of 3.39x, compared to its 5-year average of 3.44x, meaning its shares are trading below their historical average. This could mean that the share price has fallen, or sales have increased, or both. In the case of A2M, revenue has been growing over the last 3 years. Please keep in mind that context is important – and this is just one valuation technique. Investment decisions can’t just be based on one metric.
The HUB share price currently trades at a price-sales ratio of 15.79x, which compares to its 5-year long-term average of 13.32x. So, its shares are trading higher than their historical average. However, a simple multiple like this should only be the start of your research. The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! Just remember there are many different ways to value a share, like Hub24 Ltd.
