The A2 Milk Company Ltd (ASX: A2M) share price will be on watch on Wednesday following the release of an investor presentation.
At the time of writing the infant formula and fresh milk company's New Zealand-listed shares are trading 0.5% lower.
What was in the presentation?
This morning's investor presentation was much like the others the company has released over the last couple of months.
Management once again reiterated that it expects revenue growth in the second half to be broadly in line with the first. During the first half of FY 2019 a2 Milk Company delivered a 41% lift in revenue to NZ$613.1 million.
It also reaffirmed that due to increased brand and marketing investments in China and the United States, second half EBITDA margins would narrow. It expects EBITDA as a percentage of sales to be between 31% and 32%. This compares to an EBITDA margin of 35.6% in the first half.
One addition to the presentation that may have caught the eye of investors today is a warning about recent increases in dairy pricing.
Whilst the company does not expect these increases to have any significant impact on its gross margin in FY 2019, management warned that they "are likely to have some impact in FY20."
This may have spooked some investors and led to some of them hitting the sell button today. Though, I would argue that it's a little too soon to panic and any share price weakness could be a buying opportunity.
Should you invest?
I think a2 Milk Company is one of the best growth shares on the Australian share market and a great buy and hold option.
Its shares may be trading close to their all-time high, but I wouldn't let that put you off if you're planning to hold its shares for the long term.
Overall, I think it would be a great option for growth investors along with rival Bellamy's Australia Ltd (ASX: BAL) and ahead of fledgling competitor Bubs Australia Ltd (ASX: BUB).
