In early trade the a2 Milk Company Ltd (Australia) (ASX: A2M) share price had a terrible start and sank over 8% lower to $6.98.
It has since rebounded and is lower by just over 3.5% to $7.34.
Why did its shares sink lower?
With no news out of the company or broker notes to speak of, it is likely that investors have been spooked by a change in substantial holding announced yesterday afternoon.
According to the announcement, Colonial First State Asset Management has trimmed back its holding in the dairy company from a 6.4% stake to a 5.4% stake.
Although no explanation was given for the selling, it is likely that the asset manager has decided to take a bit of profit off the table following its stellar share price gain this year.
After all, a2 Milk's shares are up well over 250% since the start of the year thanks to impressive sales into the lucrative China market.
Should you buy the dip?
While I think a2 Milk is one of the best buy and hold investment options on the market, I wouldn't be a buyer at this share price.
At least not until the company has held its annual general meeting later this month. If it fails to deliver a sales update which justifies the recent share price gains, then there's every chance that its shares could tumble lower.
In light of this, I think the prudent thing to do is to keep your powder dry and wait patiently for its November 22 meeting.
