Landec Story

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LNDC -- USA Stock  

USD 11.31  0.38  3.25%

As many investors are getting excited about consumer defensive space, it is fair to go over Landec. We will try to explain if it is still possible for Landec to generate above-average margins. Is the firm valuation justified? Here we go over Landec perspective on valuation to give you a better outlook on taking a position in this stock.
Published over two weeks ago
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Is Landec growth trend slowing down?
The company currently holds 204.12 M in liabilities with Debt to Equity (D/E) ratio of 0.92, which is about average as compared to similar companies. Landec has a current ratio of 0.94, indicating that it has a negative working capital and may not be able to pay financial obligations when due. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Landec has an asset utilization ratio of 171.39 percent. This suggests that the company is making $1.71 for each dollar of assets. An increasing asset utilization means that Landec is more efficient with each dollar of assets it utilizes for everyday operations.
We determine the current worth of Landec using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Landec based exclusively on its fundamental and basic technical indicators. By analyzing Landec's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Landec's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Landec. We calculate exposure to Landec's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Landec's related companies.

Landec Investment Alerts

Landec investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Landec performance across your portfolios.Please check all investment alerts for Landec

Landec Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Landec value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Landec competition to find correlations between indicators driving the intrinsic value of Landec.

How Landec utilizes its cash?

To perform a cash flow analysis of Landec, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Landec is receiving and how much cash it distributes out in a given period. The Landec cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Landec Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at (15.34 Million)

Acquisition by Morberg John D of 78742 shares of Landec subject to Rule 16b-3

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 grant of non-qualified stock option (right to buy) by Morberg John D, Chief Financial Officer, on 21st of January 2021. This event was filed by Landec Corp with SEC on 2021-01-21. 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?

The entity reported the previous year's revenue of 587.29 M. Net Loss for the year was (44.41 M) with profit before overhead, payroll, taxes, and interest of 71.99 M.

Margins Breakdown

Landec profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Landec itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Landec profit margins.
Operating Margin(7.71)
EBITDA Margin(0.036)
Gross Margin0.12
Profit Margin(0.0601)

Landec Earnings Before Interest Taxes and Depreciation Amortization EBITDA is decreasing over the last 5 years. Moreover, Landec Revenue Per Employee is somewhat stable at the moment.

Over 3 percent rise for Landec. What does it mean for investors?

Current value at risk indicator falls down to -3.26. Possible price jump? Landec currently demonstrates below-verage downside deviation. It has Information Ratio of 0.04 and Jensen Alpha of 0.16. However, we do advice investors to further question Landec expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Takeaway on Landec Investment

Whereas many of the other players under the packaged foods industry are still a bit expensive, Landec may offer a potential longer-term growth to investors. While some investors may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Landec.

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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