LW

Lamb Weston Holdings Inc

Consumer


Presented:06/11/2020
Price:$63.26
Cap:$9.24B
Current Price:$71.31
Cap:$10.17B

Presented

Date06/11/2020
Price$63.26
Market Cap$9.24B
Ent Value$16.36B
P/E Ratio19.45x
Book Value$1.85
Div Yield1.36%
Shares O/S146.04M
Ave Daily Vol1,983,572
Short Int5.39%

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: CF Industries Holdings Inc (CF), Coca-Cola Co/The (KO), Conagra Brands Inc (CAG), Lamb Weston Holdings Inc (LW)

Highlights

The presenter is short shares of Lamb Weston Holdings Inc (LW), which he believes is subject to pricing risk, yet is valued as a consumer staple. He acknowledges that the debate over pricing risk and whether LW is a food processor or staple has existed since LW spun off from CAG in 2016, as well as the fact that it’s been a bad short; yet, he believes that the pricing environment is now different and that FY2020 earnings (FY2020 ended May 31, 2020) will disappoint. Depending on how bad pricing gets, he expects weakness to manifest negatively on LW’s EPS & multiple.

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Idea Discussion

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