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Here’s why the Bellamy’s Australia Ltd share price soared again today

Credit: Bellamy's

The share price of market-favourite Bellamy’s Australia Ltd (ASX: BAL) has climbed higher again today. The shares are currently trading for $14.39, up 4.8% compared to yesterday’s closing price, but rose to a fresh all-time high of $14.65 earlier in the session.

Indeed, setting new 52-week highs has become something of a common occurrence for Bellamy’s over the course of 2015. The shares have skyrocketed since the beginning of January, rising 772% in that time, and have more than doubled in price since mid-October.

Source: ASX website; Bellamy's one-year share price chart

Source: ASX website; Bellamy’s one-year share price chart

Bellamy’s is an Australian producer of 100% certified organic food and formula products for babies and toddlers. It is one of the many companies benefiting from the skyrocketing demand for infant formula around the world, particularly in China where residents are hesitant to trust the quality or safety standards of food products produced in that country.

The company has struggled to keep up with the demand thus far but has signed two separate manufacturing agreements with Tatura Milk Industries Ltd, a wholly owned subsidiary of Bega Cheese Ltd (ASX: BGA), as well as FONTERRA ORD UNIT (ASX: FSF) even more recently. This should help to alleviate some of that pressure in the future.

Bellamy’s shares are by no means cheap today, but the market expects strong earnings growth when the company reports its half-year results in February and in the years to come.

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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.

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