The A2 Milk Company Ltd (ASX: A2M) share price is one of the best performing shares on the S&P/ASX 200 Index (ASX: XJO) today. While the ASX 200 is up a healthy 1.26% today to a new record high, A2 Milk shares are doing even better.
A2 Milk is currently up 3.85% to $5.54 a share, after rising as high as $5.58 earlier in the trading day. This move will come as something of a relief for shareholders, who have had to watch the former high-flying dairy company descend to multi-year lows in recent weeks.
It was only earlier this month that A2 dropped to a ~4-year low of $5.04, meaning the shares are up close to 10% in just a fortnight. But that rise doesn't mask the company's disappointing performance in just the past year. It was only 10 or so months ago when this company was at a record high of $20.05. Since June 2020, A2 Milk shares have dropped close to 75%.
A series of earnings downgrades and sluggish export market to China is largely to blame. But enough crying over spilt milk, as it were. So why are A2 Milk shares surging today?
A2 Milk share price caps off the week with a bang
Well, we've had no major official news or announcements out of the company today, so that rules that out. A2's last market announcement was on Tuesday, and that was just a routine notice regarding some institutional share ownership.
Therefore, today's big share price move for A2 might just be some good old fashioned buying pressure. Investors (or perhaps one large investor) might have looked at A2 Milk shares and seen a perceived bargain, given the company's historical valuation. As my Fool colleague James Mickleboro noted on Tuesday, A2 has been at the front of the pack for the most popular ASX trades recently.
Or perhaps, as the Fool's chief investment officer Scott Philips discussed this week, investors might be responding to some increased broker optimism for the company.
Maybe it's a combination of all of these factors that are helping to push the A2 Milk share price up today. Whatever the reason, I'm sure it's welcome for A2 shareholders. On the current A2 Milk Company share price, the business has a market capitalisation of $3.96 billion.
