Shares of Bellamy’s Australia Ltd (ASX: BAL) have continued their bumpy start to the new year, falling another 2% early in today’s session. That compares to a 0.3% gain for rival A2 MILK FPO NZ (ASX: A2M) (“A2 Milk”) and a 0.6% decline for the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

What’s happening to Bellamy’s shares?

Bellamy’s was one of Australia’s top-performing shares in 2015. After debuting on the ASX at just $1 per share back in August 2014, the shares hit an all-time high at $16.50 just one week ago. In the time since however, they’ve retreated nearly 20% to just $13.52.

It should be noted that the fall is unlikely to have anything to do with the underlying business itself. Indeed, demand for baby formula – dubbed “white gold” – has been in red-hot demand around the globe with supermarkets and pharmacies struggling to keep their stocks shelved.

Demand could continue to soar internationally, especially after China recently scrapped its controversial ‘one child policy’.

Instead, the fall can most likely be attributed to the massive run-up in share price experienced by the group over the last 16 months, as highlighted above. Although there is certainly potential for the company to get even larger than it is today, investors are likely becoming unnerved about the heights at which the shares are currently trading – they need to see results that can justify their valuation.

Still, Bellamy’s is expected to post a bumper first-half earnings result when it reports in February while the A2 Milk and Blackmores Limited (ASX: BKL) businesses should also continue to perform strongly.

Should you buy?

I still own shares of Bellamy’s, although I did sell some recently. Personally, I think that seems like a fair assessment in itself. I believe Bellamy’s still has a very promising future — so much so that I’m holding onto a decent amount of shares — but investors should be cautious of buying at the current price. That said, investors could also look to add Bellamy’s to their portfolio should the shares fall much further in price.

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Motley Fool contributor Ryan Newman owns shares of Bellamy's Australia. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia owns shares of 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 Bruce Jackson.