The Bellamy's share price is up 34% in a week

The Bellamy's Australia Ltd (ASX:BAL) share price has zoomed 34% higher in the space of just one week. Here's what you need to know…

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Bellamy's Australia Ltd (ASX: BAL) share price has continued its impressive run on Wednesday.

At one stage the infant formula and baby food products company's shares were up as much as 10% to $10.94 this morning. Its shares have since given back some of these gains, but still sit 9% higher at $10.88 at the time of writing.

This means the Bellamy's share price has now risen a remarkable 34% since this time last week.

Why is the Bellamy's share price on fire?

With no news out of the company today's strong share price rise is a bit of a mystery, but there are a couple of potential catalysts for the buying.

One catalyst could be short sellers buying back shares to close their positions. According to data provided by ASIC, at the last count Bellamy's had 11.6 million shares or 10.3% of its issued shares held short.

This compares to its 30-day average volume of 2.27 million according to Bloomberg. Which means that there are five times more shares held short than the daily average volume. Clearly when short sellers decide that enough is enough, there will be a lot of demand from the buy side.

Incidentally, at the time of writing the volume of shares traded stands at 2.7 million today, which is notably higher than its daily average.

Another potential catalyst could be speculation that the company may receive its SAMR accreditation soon. This accreditation is required to sell its Chinese-labelled products on the China mainland.

Given the company's strong brand awareness in the country, many believe that SAMR accreditation will be a key driver of sales and profit growth over the coming years.

Should you invest?

I think that Bellamy's could be a great long term investment option (if it receives its SAMR accreditation) along with rival A2 Milk Company Ltd (ASX: A2M). But it is worth remembering that it is a reasonably high risk option, so may be unsuitable for some investors.

Elsewhere in the industry, the Bubs Australia Ltd (ASX: BUB) share price is up 15% in late morning trade after announcing plans for a joint venture in China.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Industrials Shares

Up 39% in a year, is there more growth to come for this ASX 200 share?

IML Equity Analyst Josh Freiman shares his views on a major ASX 200 industrial stock.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Catapult, Flight Centre, Nufarm, and Xero shares are storming higher today

These shares are having a strong session on Thursday. But why? Let's find out.

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Healthcare Shares

3 ASX healthcare shares going gangbusters on Thursday

Investors are sending these ASX healthcare stocks soaring today. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 made it three-for-three losses in a row this Wednesday.

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Brickworks, James Hardie, Megaport, and OFX shares are charging higher today

These shares are having a good time on hump day. But why?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured another day of selling this Tuesday.

Read more »

Man pointing at a blue rising share price graph.
Technology Shares

Guess which ASX 300 tech stock is already up 64% in November!

The ASX 300 tech stock is surging higher this month. But why?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ANZ, Block, Neuren, and Pilbara Minerals shares are pushing higher today

These shares are having a solid session on Tuesday. But why? Let's find out.

Read more »