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.
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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".
