Landec Story

LNDC -- USA Stock

USD 11.32 0.01 0.09%

Macroaxis Story

Landec is scheduled to announce its earnings today. The next earnings report is expected on the 30th of March 2021. Landec Revenue Per Employee is projected to decrease significantly based on the last few years of reporting. The past year's Revenue Per Employee was at 839,122. The current year Invested Capital is expected to grow to about 608.2 M, whereas Net Income Per Employee is forecasted to decline to (55.7 K). As many investors are getting excited about consumer defensive space, it is fair to go over Landec as an investment option. We will analyze why Landec investors may still consider a stake in the business.

Published over two weeks ago

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You think Landec (NASDAQ:LNDC) debt is an issue for investors?

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. 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.

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.

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?

Landec 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.

Asset Breakdown

375.8 M

Assets Non Current

117.3 M

Goodwill

151.9 M

Current Assets

	Total Assets	527.72 Million
	Current Assets	151.95 Million
	Assets Non Current	375.77 Million
	Goodwill	117.3 Million
	Tax Assets	3.02 Million

Landec has 76 percent chance to finish below $10.82 next week

The value at risk is down to -3.26 as of today. Landec currently demonstrates below-verage downside deviation. It has Information Ratio of 0.05 and Jensen Alpha of 0.14. 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.

The Bottom Line

Whereas some other firms in the packaged foods industry are either recovering or due for a correction, Landec may not be as strong as the others in terms of longer-term growth potentials. While some investors may not share our view, we believe it may be a good time to increase your existing holdings in Landec as the risk-reward trade off is appealing enough to hold a position. 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

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

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 Ellen Johnson do not own shares of Landec. Please refer to our Terms of Use for any information regarding our disclosure principles.

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