This month I’ve been looking at how investments in the IPOs of a number of popular ASX shares have fared.
This includes the likes of Afterpay Ltd (ASX: APT) and CSL Limited (ASX: CSL). You can read about those IPOs here and here.
Today I thought I would turn my attention to New Zealand-based infant formula and fresh milk company A2 Milk Company Ltd (ASX: A2M).
How has a2 Milk Company performed since its ASX listing?
Technically speaking, a2 Milk Company didn’t list on the Australian share market through an IPO.
It first listed on the New Zealand stock exchange all the way back in 2004. The company then sought a dual listing on the Australian share market in March 2015.
The ASX listing didn’t impact its New Zealand listing, nor did it involve the raising of any new capital.
Once its shares were listed on the ASX, you could have picked them up for 56 cents apiece. This means that a $10,000 investment in its shares would have given you a total of 17,857 shares.
Since then a lot has changed. For a long time the company was playing catch up with rival Bellamy’s and seen as just a small time player in the industry. It’s also interesting to note that its operations were loss-making, much like those of Bubs Australia Ltd (ASX: BUB) today.
Today it is the largest ANZ infant formula brand and has a growing fresh milk footprint both here and in the United States.
It has also transformed from being a loss-making entity into one of the most profitable companies on the Australian share market.
The upper end of the company’s guidance for FY 2020 implies revenue of NZ$1,750 million and earnings before interest tax, depreciation, and amortisation of NZ$560 million. This represents a sizeable 34.1% and 35.4% increase, respectively, on the prior year.
Unsurprisingly, given this explosive growth in its earnings since 2015, its shares have been exceptionally strong performers.
Today’s the a2 Milk Company share price is changing hands for $17.64. Which means that the 17,857 shares you picked up in 2015 would now be worth a total of $315,000.
I think that is a pretty incredible return over a period of just over five years. But perhaps what is even better is that a2 Milk Company’s growth is far from over.
Given the modest market share its infant formula has in the China market and its expanding fresh milk footprint, I believe it is well-positioned to continue its strong earnings growth for a long time to come.
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More reading
- Brokers name 3 ASX 200 shares to buy right now
- 10 quality ASX shares to buy in June
- 1 key trait to look for with most top ASX growth shares
- Is the A2 Milk Company share price in the buy zone?
- 3 outstanding ASX growth shares to invest $3,000 into today
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and CSL Ltd. The Motley Fool Australia owns shares of A2 Milk and AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post If you invested $10,000 in the a2 Milk Company ASX listing, this is how much you’d have now appeared first on Motley Fool Australia.
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