Landec Story

<div class='circular--portrait' style='background:#FF0F00;color: #FFFFF0;font-size:3em;'>LND</div>
LNDC -- USA Stock  

USD 10.83  0.19  1.72%

Landec is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 6th of October 2020. As many baby boomers are still indifferent towards consumer defensive space, it makes sense to go over Landec as a unique choice for millenniums. Here we also measure the ability of Landec to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over three months ago
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Is Landec (NASDAQ:LNDC) outlook still optimistic based on the current debt level?
The company currently holds 224.7 M in liabilities with Debt to Equity (D/E) ratio of 0.97, which is about average as compared to similar companies. On a scale of 0 to 100, Landec holds a performance score of 6. The company secures a Beta (Market Risk) of -0.1329, which conveys not very significant fluctuations relative to the market. Let's try to break down what Landec's beta means in this case. As returns on the market increase, returns on owning Landec are expected to decrease at a much lower rate. During the bear market, Landec is likely to outperform the market. Although it is vital to follow Landec price patterns, it is good to be conservative about what you can do with the information regarding equity historical price patterns. The philosophy towards estimating future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Landec technical indicators, you can presently evaluate if the expected return of 0.29% will be sustainable into the future. Please exercises Landec value at risk, and the relationship between the jensen alpha and semi variance to make a quick decision on whether Landec current price movements will revert.
Landec financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Landec, including all of Landec's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Landec assets, the company is considered highly leveraged. Understanding the composition and structure of overall Landec debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Landec Total Debt

Landec liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Landec has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Landec balance sheet include debt obligations and money owed to different Landec vendors, workers, and loan providers. Below is the chart of Landec main long-term debt accounts currently reported on its balance sheet.
You can use Landec financial leverage analysis tool to get a better grip on understanding its financial position

How important is Landec's Liquidity

Landec financial leverage refers to using borrowed capital as a funding source to finance Landec ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Landec financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Landec's total debt and its cash.

Landec exotic insider transaction detected

Legal trades by Landec insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Landec insider trading alert for general transaction of common stock by Nelson Obus, the corporate stakeholder, on 13th of January 2021. This event was filed by Landec Corp with SEC on 2021-01-13. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is driving Landec Investor Appetite?

Landec reported the previous year's revenue of 590.37 M. Net Loss for the year was (38.19 M) with profit before overhead, payroll, taxes, and interest of 71.99 M.

Asset Breakdown

345.4 M
Assets Non Current
108.8 M
Goodwill
139.5 M
Current Assets
Total Assets484.99 Million
Current Assets139.55 Million
Assets Non Current345.44 Million
Goodwill108.82 Million
Tax Assets3.02 Million

Another setback for Landec investors

The treynor ratio is down to -2.56 as of today. Landec shows above-average downside volatility for the selected time horizon. We advise investors to inspect Landec further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Landec future alpha.

The Current Takeaway on Landec Investment

Whereas some other entities under the packaged foods industry are still a bit expensive, Landec may offer a potential longer-term growth to investors. All things considered, as of the 5th of October 2020, we believe that Landec is currently undervalued with below average probability of distress in the next two years. Our current 30 days Buy-Hold-Sell recommendation on the company is Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Landec. Please refer to our Terms of Use for any information regarding our disclosure principles.

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