American Dairy Inc.

Company Description

American Dairy operates in China under the umbrella of its parent company Feihe Dairy. The company specializes in producing milk powder and soybean products and has a market cap of $729 million.

First-Quarter Results

American Dairy's share price has been on fire since the company reported gang-buster first-quarter results on May 14 that were ahead of expectations.

Sales were up 191% from last year to $113.8 million. Income was up 282% to $27.8 million, producing earnings of $1.55 per share.

CEO Leng You-Bin said that the company's results were boosted by the melamine crisis in China, pushing consumer towards its products. Mr. You-Bin went on to say that he expects the company's long-term growth rates to return to a normal level in coming quarters.

Estimates Spike

After the solid quarter, analysts raised their earnings forecasts, with the current-year estimate more than doubling to $3.34 per share. The next-year estimate is up to $4.49, a 34% growth projection.

The Chart

Shares of ADY have been rallying since news of the great quarter hit the Street, advancing from $17 to a recent high above $43. Take a look at the big move in the chart below.