MENU

Why the a2 Milk Company Ltd (Australia) share price sunk lower today

In afternoon trade the a2 Milk Company Ltd (Australia) (ASX: A2M) share price is down by around 3% to $3.33.

This makes the fast-growing dairy company one of the worst performers on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).

What happened?

Whilst there was no material news out of the company today, one announcement that caught my eye this morning related to further insider selling.

According to the release, A2 Milk’s CEO Geoffrey Babidge has offloaded a further 600,000 shares.

This means that in the last 18 months Mr Babidge has halved his holding in the company to 5 million partly paid ordinary shares.

Once again he has reiterated that this sale is in order to achieve a more balanced portfolio over time, and nothing to do with the company’s performance.

Whilst I think this is more than reasonable, I can also fully understand why some investors may be spooked by such actions.

Especially considering how directors at rival Bellamy’s Australia Ltd (ASX: BAL) offloaded a significant amount of shares ahead of its fall from grace.

What now?

A2 Milk’s shareholders could take heart from the fact that in the past its shares have generally gained strongly in the weeks following Mr Babidge’s share sales.

While only time will tell what happens from here, I would suggest investors remain calm and continue to hold its shares for the long-term.

Finally, as well as A2 Milk I believe these exciting growth shares are great buy and hold options today.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any 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 Bruce Jackson.

HOT OFF THE PRESSES: My #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 Financial Services Guide (FSG) for more information.