LW - Lamb Weston: My Strategy After Another Major Post-Earnings Plunge

2024-07-25 16:52:40 ET

Summary

• Lamb Weston stock experienced a significant plunge after disappointing Q4 results and 2025 guidance, now trading at about $56 per share.
• Concerns about management credibility and execution, along with industry-wide challenges, contribute to uncertainty about the stock's future performance.
• Potential strategies for buying Lamb Weston shares include waiting for further decline, monitoring insider buying, and considering year-end tax-loss selling opportunities.

I last wrote about Lamb Weston ( LW ) back in April 2024, and I suggested the stock was a buy, after a 20% plunge in the share price which occurred after the company reported Q3 earnings for 2024. At that time, the stock was trading for just over $100 per share, and it dropped to about $81. I was willing to give management the benefit of the doubt after a challenging rollout of a new ERP system, which had impacted results in Q3. I was a buyer after the plunge to $81. The stock subsequently rallied to nearly $90, just a few weeks later in May, and I sold my shares. I have looked at this stock recently because it is one of many that I keep on a watchlist. I thought it was starting to get more interesting due to a recent decline to about $77 per share, but I did not really like the fact that it was declining just before earnings, especially as small-cap stocks were in rally mode....

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