Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

2 Reasons a2 Milk Company (A2M) Shares Could Outperform The ASX 200 In 2019

The a2 Milk Company Ltd (ASX:A2M) is probably the best dairy company in Australia, and could well go on to outperform the S&P/ASX 200 (INDEXASX:XJO) (^AXJO) again in 2019.

The a2 Milk Company Ltd (ASX: A2M) is probably the best dairy company in Australia, and could well go on to outperform the S&P/ASX 200 (INDEXASX: XJO) (ASX: XJO) again in 2019.

Who Is a2 Milk Company?

The a2 Milk Company is one of Australia and New Zealand’s largest infant formula producers and the leader in a2-only protein-based dairy products. It has operations in New Zealand, Australia, USA and China thanks to key supply and distribution agreements.

2 Reasons a2 Milk Company Shares Could Outperform in 2019

  1. More profit growth in store. Despite its shares rising from just $0.50 five years ago to over $10.50 today, I think the opportunity is large enough to support further profit growth many years into the — albeit uncertain — future. During its most recent trading update, a2 Milk reported 40% revenue growth in the first four months of its 2019 financial year. Profit was up 60% year over year.
  2. The China opportunity. In 2018, a2 Milk increased its supply relationships with Fonterra (ASX: FSF) and Synlait Milk Ltd (ASX: SM1) in anticipation of future growth. Synlait supplies a2 Milk in the global markets.
    The key uncertainty for a2 Milk is the heightened regulatory risk, specifically the changes to the Cross-border E-Commerce (CBEC) rules in China. However, demand for the company’s platinum infant formula is incredible but likely underestimated. For example, Australian mothers and fathers are still getting annoyed that Asian buyers are storming Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) to buy bulk amounts of tinned formula to send back to China.

Summary

a2 Milk is one of Australia’s (cough New Zealand’s) global success stories. While a2 Milk’s future is uncertain — indeed, nothing is guaranteed — I think the odds might still be tilted in the favour of savvy and thick-skinned long-term investors looking for an overseas growth story.

Having said that, a2 Milk Company is not a company I own in my share portfolio. However, I own one of the overseas growers in the free investment report below.

FREE: 2 of Our Top ASX Growth Shares For 2019

[ls_content_block id=”14947″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content