The A2 Milk Company Ltd (ASX: A2M) share price had a great 2017 and 2018, resulting in A2 Milk being a standout performer. Currently, the A2 Milk share price continues to push its all-time high and trades at $14.61.
Since the start of 2019, the A2 Milk share price has already increased by over 35%. At this rate, 2019 could be another year where A2 Milk significantly outperforms the market.
A2 Milk shows growth across all regions
In the company's recent half-year report, milk sales growth reached 12% in Australia and 114% in the United States. This was accompanied by an 83% growth for infant formula sales in China.
Results as such drove revenues higher by 41%, EBITDA by 53% and NPAT by 55%. The earnings per share figure increased over 50% to 20.85 cents from the previous half-year.
There was an increase across A2 Milk's product lines which consists of liquid milk, infant formula, and other nutritional products.
The cashflow statement shows clear organic growth in the cash from operating activities, resulting in an increase of A2 Milk's cash reserve from the previous half-year.
Despite the very high PE ratio of 45.4 that A2 Milk trades on, this can be justified with the growth of A2 Milk's earnings.
Where does A2 Milk go from here?
The calibre of A2 Milk's marketing is second to none. The company has announced that it will continue playing to its strengths and will prioritise marketing spend in key regions such as China and the United States.
Distribution in the United States has been of interest to A2 Milk and has experienced strong momentum in the past few years. In just a six-month period between June 2018 to December 2018, A2 Milk increased the total number of stores by over 4,000 in the United States. Currently, there are over 10,000 stores in the United States that distribute A2 Milk's products.
Foolish takeaway
With A2 Milk's strong financials, there is plenty of flexibility for expansion. Given its success with marketing, I wouldn't be surprised if A2 Milk finishes another year as a star growth stock.
Here is another ASX company that could be a star growth stock of 2019.
