LW

Lamb Weston Holdings Inc

Consumer


Presented:08/06/2019
Price:$64.95
Cap:$9.49B
Current Price:$71.31
Cap:$10.17B

Presented

Date08/06/2019
Price$64.95
Market Cap$9.49B
Ent Value$11.46B
P/E Ratio20.45x
Book ValueN/A
Div Yield1.23%
Shares O/S146.07M
Ave Daily Vol1,703,794
Short Int6.55%

Current

Price$71.31
Market Cap$10.17B
Lamb Weston Holdings, Inc. engages in the production, distribution, and marketing of value-added frozen potato products. It operates through the following business segments: Global, Foodservice, Retail, and Other. The Global segment includes branded and private label frozen potato products sold in North America and international markets. The Foodservice segment comprises branded and private label frozen potato products sold throughout the United States and Canada. The Retail segment consists consumer facing retail branded and private label frozen potato products sold primarily to grocery, mass merchants, club, and specialty retailers. The Other segment compose of vegetable and dairy businesses. The company was founded on July 5, 2016 and is headquartered in Eagle, ID.

Publicly traded companies mentioned herein: Lamb Weston (LW)

Highlights

The presenter is short shares of Lamb Western (LW), the No.1 potato processor in North America and the No. 2 globally. The company currently has ~$9.5B market cap and ~$11.8B EV. It has been over earning in the past several years because of a capacity shortage in the market. However, the presenter believes that the secular trend will revert once all major players’ capacity comes online in 2019 and 2020. The increased capacity should cause LW to face pricing pressures. The stock currently trades at $65, and he sees a 40% downside if things play out as he expects.

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Idea Discussion

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