What: Shares in health product manufacturer Blackmores Limited (ASX: BKL) have soared as much as 30% today and touched a high of $200 after releasing impressive first quarter sales results, an upbeat Annual General Meeting address and announcing an exciting partnership with leading dairy manufacturer Bega Cheese Ltd (ASX: BGA).
So What: The share price of Blackmores has rocketed in the past year, gaining a staggering 510% as investors have applauded its Asian-focussed growth strategy.
Blackmores' decision to partner with Bega to develop and manufacture a range of nutritional foods including high-quality infant formula comes hot on the heels of an outstanding 14 months as a listed firm for baby food marketer Bellamy's Australia Ltd (ASX: BAL). The shares of Bellamy's Australia have rallied a massive 490% since first trading in August 2014.
Now What: Given the soaring profits reported by Bellamy's Australia it was definitely only a matter of time before new entrants began competing for a slice of this lucrative market. Given the size of the Asian market opportunity, there is certainly room for more players however with regards to the domestic market a situation of overcrowding and declining margins could well occur.
For investors, all three stocks are currently trading not just near their 52-week highs but also near all-time highs. At these levels, the stocks are looking very fully priced which could mean further near-term upside is limited.
