The Blackmores Limited (ASX: BKL) share price has been one of the best performers on the market on Tuesday.
The health supplements company's shares finished the day over 6% higher at $159.11. This brought its 12-month return to 37%.
What happened?
With no news out of the company, I feel that today's move higher is likely to be related to the trading update provided by Bellamy's Australia Ltd (ASX: BAL) yesterday.
According to last night's release, Bellamy's has been experiencing strong demand for its products and, as a result, has upgraded its full-year revenue growth guidance from between 15% and 20% to between 30% and 35%.
Furthermore, the company has upgraded its EBITDA margin guidance from between 17% and 20% to the new range of 20% to 23%.
While the company made no mention of it, I suspect a lot of this growth could be coming from the lucrative daigou channel.
In light of this, I suspect that investors are betting that Blackmores and other companies operating in similar markets are experiencing strong demand for their respective products from the channel.
Unsurprisingly, the A2 Milk Company Ltd (ASX: A2M) share price has also climbed strongly today on the news, as has Bubs Australia Ltd (ASX: BUB) share price.
Should you invest?
I think that Blackmores is a great investment option even after its strong gain today.
Its shares may be changing hands at a lofty 47x trailing earnings, but I believe it is more than capable of growing its earnings at a pace that justifies such a premium.
Overall, this could make it a great buy and hold investment option alongside both Bellamy's and a2 Milk Company.
Though it is worth considering that it too could provide a trading update of its own in the near future. Investors may want to consider holding out for that.
