Landec Story

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LNDC -- USA Stock  

USD 11.32  0.37  3.17%

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 millenniums are trying to avoid consumer defensive space, it makes sense to go over Landec a little further and try to understand its current market patterns. We will check if the company can maintain a respectable level of debt while minimizing operating losses.
Published over two weeks ago
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Continue to hold Landec (NASDAQ:LNDC) based on its current debt obligations?
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.
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?

The current bullish price patterns experienced by current Landec shareholders may encourage investors to take a closer look at the firm as it is trading at a share price of 11.27 on 215,924 in trading volume. The company directors and management have been very successful in rebalancing the firm assets at opportune times to take advantage of market volatility in December. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.98. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Asset Breakdown

375.8 M
Assets Non Current
117.3 M
151.9 M
Current Assets
Total Assets527.72 Million
Current Assets151.95 Million
Assets Non Current375.77 Million
Goodwill117.3 Million
Tax Assets3.02 Million

Landec implied volatility may change after the rise

Landec current downside deviation builds up over 2.17. Landec currently demonstrates below-verage downside deviation. It has Information Ratio of 0.04 and Jensen Alpha of 0.26. 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 firms within the packaged foods industry are still a little expensive, even after the recent corrections, Landec may offer a potential longer-term growth to investors. To conclude, as of the 6th of January 2021, our final 30 days buy vs. sell advice on the company is Strong Sell. However, we believe Landec is currently undervalued with below average odds of financial distress for the next two years.

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 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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