One of the most outstanding results of the recent earnings season in my opinion was Bellamy’s Australia Ltd (ASX: BAL).

In FY 2016 the organic infant formula producer almost doubled its sales year on year from $125.3 million to a massive $244.6 million. This was fantastic, but its bottom line performance was even more impressive.

Thanks to price increases and positive changes in its channel mix Bellamy’s was able to increase its earnings before interest and tax margin to 22.2% from 9.8% in FY 2015. This ultimately led to net profit after tax growing an astonishing 322% to $38.3 million. Basic earnings per share came in at 39.8 cents.

Despite this strong result its share price has barely budged since the announcement. Whilst this is no doubt frustrating for existing shareholders, I see it as a great opportunity for buy and hold investors who do not already own Bellamy’s shares.

The current consensus price target on Bellamy’s shares according to The Financial Times is $16, which represents potential upside of over 16% from Friday’s closing price.

Considering the sheer size of the China market and the insatiable demand it is experiencing there, I believe Bellamy’s strong earnings growth potential puts it in a great position to not only hit the price target, but go far beyond it over the next few years.

As I’ve mentioned previously, Bellamy’s management has estimated that a 5% share of the China market would be worth approximately $900 million in annual sales. Thanks to its trusted brand and high quality product I believe Bellamy’s is more than capable of gaining a market share of at least that size in time.

But like other companies such as Blackmores Limited (ASX: BKL) and a2 Milk Company Ltd (Australia) (ASX: A2M), regulatory changes in China will always be that one nagging concern for investors.

Although personally I don’t believe there is anything to worry about, I feel it would be prudent for investors to keep a close eye on any developments in China that may hinder the company’s growth.

But for now, I believe Bellamy’s is a great long-term investment and would be a great addition to most portfolios today.

Lastly, before investing in Bellamy's I would highly recommend taking a quick look to see if you own any of these three wealth-destroying shares currently. Now might be an opportune time to swap them out if you ask me.

3 Rotten Shares to Sell, and 1 to Buy Today

After a double-digit rally for the ASX since 2016 lows, investors should be on high alert. You'll find a full rundown below of 3 shares we think you should avoid today plus one top pick worth buying, even if the market turns south and the RBA keeps rates at an "emergency low." Simply click here to uncover these stocks.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. 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.