A2 Milk Company shares are up 41% in 2019: Is it too late to invest?

The A2 Milk Company Ltd (ASX:A2M) share price has been on fire again in 2019. Is it too late to invest?

| More on:
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

One of the best performers on the S&P/ASX 200 index in 2019 has been the A2 Milk Company Ltd (ASX: A2M) share price.

Since the start of the year the fresh milk and infant formula company's shares have gained a sizeable 41%.

Why is the a2 Milk share price up 41% in 2019?

Investors have been scrambling to get hold of the company's shares this year after it delivered yet another impressive set of results.

In its most recent update at the Macquarie Group Ltd (ASX: MQG) conference in May, a2 Milk Company revealed its results for the nine months to March 31.

According to the release, over the nine months the company has seen its total revenue increase 42% on the prior corresponding period to NZ$938 million. Management advised that this reflected continued sales growth in nutritional products and liquid milk.

And although the company's margins will narrow slightly due to a material marketing investment, it is still positioned to deliver another bumper full year profit result.

Is it too late to buy shares?

Despite the impressive share price rally in 2019, I don't believe it is too late to invest and would still consider the company to be one of the best buy and hold investment options on the market.

This is due to its massive market opportunity in China and the growth of its fresh milk in the United States.

One broker that agrees that it isn't too late to buy shares is Goldman Sachs.

Late last month the broker released a note which revealed that its analysts have retained their buy rating and $15.70 price target on the company's shares.

This price target implies potential upside of around 11% over the next 12 months.

Goldman Sachs appears confident that the company can continue to grow its market share in China, underpinning strong earnings growth for a number of years to come.

It is largely for this reason that the broker prefers a2 Milk Company over rival Bellamy's Australia Ltd (ASX: BAL) at present. A recent note out of the investment bank reveals that it has a neutral rating and $9.00 price target on Bellamy's shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Bellamy's Australia. 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

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. 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

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »