The a2 Milk Company Ltd (Australia) (ASX: A2M) share price has been one of the best performers on the Australian share market this year.
Year-to-date the dairy company's shares have risen a staggering 57%, bringing their 12-month return to a massive 125%.
Is it too late to invest in this market darling?
Whilst the days of it being a bit of a bargain buy are clearly behind it now, I still think that a2 Milk could provide outsized returns for investors over the long-term.
Demand for its products in the lucrative China market have continued to grow strongly.
Thanks partly to the cross border e-commerce channel into China, in April the company reported that sales of its a2 Platinum infant formula product exceeded management's expectations for the nine months ended March 31.
This meant that revenue for the period rose sharply to NZ$388.5 million, leading management to upgrade its full-year revenue guidance to approximately NZ$525 million.
This guidance means that management has forecast an impressive 49% year-on-year increase in revenue in FY 2017.
With growth of that level, I believe that 29x annualised earnings is a more than fair price to pay to own its shares.
In light of this, I would suggest investors that wish to gain exposure to the infant formula boom choose a2 Milk ahead of rivals Bubs Australia Ltd (ASX: BUB) and Bellamy's Australia Ltd (ASX: BAL), despite the incredible rally in its shares this year.
