The A2 Milk Company Ltd (ASX: A2M) share price has been on a rollercoaster ride over the past few years.
In the earlier part of the demi-decade, the infant formula company's shares were on an upwards trend. However, the onset of the COVID-19 pandemic changed the course of A2 Milk's once lofty valuations.
Nonetheless, A2 Milk has created wealth for investors who bought and held its shares over the long term.
Below, we calculate how much you would have made if you'd bought $10,000 worth of A2 Milk shares five years ago.
What's happening with A2 Milk in 2022?
Since the start of the year, the A2 Milk share price has posted a loss of around 8%.
It's no secret that cross-border trade issues led to the deterioration of the company's share price in recent times.
The global pandemic has severely disrupted A2 Milk's operations, causing logistical challenges between Australia and China. This has weighed down on investor sentiment, causing a sell-off in A2 Milk shares.
As such, demand and supply volatility has caused excess inventory levels, along with the China infant nutrition market which has significantly reduced in growth.
This trend follows the release of China's 2020 birth numbers which showed a reduction in the birth rate.
Management noted that the market landscape has experienced unprecedented change over the past 12 months, requiring the company to adapt.
So, how much would you have if you'd invested $10,000 from five years ago?
If you'd invested $10,000 into A2 Milk shares in 2017, you would have picked them up for approximately $2.93 apiece. This equates to about 3,412 shares without topping up along the way during the retracement periods.
Fast-forward to today, the current A2 Milk share price is $5.04. This means those 3,412 shares would be worth $17,196.48.
When looking at percentage terms, this implies an average yearly return of 11.45%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has given back 4.99% over the same timeframe.
If you are wondering about dividends, the company has chosen not to pay a percentage of its profits to date. Instead, it has decided to increase brand investment to drive consumer demand, and recently bolster its leadership team.
In comparison, investing the same amount in an ASX 200 index-tracking fund would have netted you a total figure of $12,646.92 (albeit excluding any dividends).
A2 Milk share price summary
Over the past 12 months, A2 Milk shares have lost almost 40% following a rollercoaster ride for investors.
The company's shares were heavily sold off from July 2020 after reaching an all-time high of $20.05. Since then, its shares hit a 52-week low of $4.97 in January 2022, before hovering around those levels.
Based on today's price, A2 Milk presides a market capitalisation of roughly $3.75 billion and has approximately 743.66 million shares outstanding.
