Bellamy’s Australia Ltd and Blackmores Limited shareholders: Look away now

Credit: Bradley Stemke

Attention Bellamy’s Australia Ltd (ASX: BAL) and Blackmores Limited (ASX: BKL) shareholders, look away now.

Source: Google Finance

Source: Google Finance

Shortly before midday today, shares of the two companies were riding 9.4% and 10% lower, respectively, despite the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rallying 1% higher.

For Blackmores shareholders, today’s falls are hitting particularly hard because the company’s share price is now down more than 21% in a month. Bellamy’s is down 4.5%.

However, it’s important to take today’s share price movements with a pinch of salt because long-term holders are likely sitting on huge gains from their investments in Bellamy’s and Blackmores. Respectively, they’re up 640% and 324% year over year.

Indeed, it’s vital investors focus on buying and holding great businesses at good prices.

For net buyers today, however, while Blackmores and Bellamy’s may be great businesses, their current lofty valuations mean long-term investors may be best served in holding out for a more compelling entry point.

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Motley Fool writer/analyst Owen Raszkiewicz has a financial interest in Bellamy's Australia. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. 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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