Chart Voodoo: LWAY
What a nice chart to look at
*Via the inspiration of a good friend who talked me out of a stock picking funk, I am going to simply share charts that I’m interested in on a more regular basis.
LWAY is a family-controlled, category-dominant branded dairy company selling its probiotic, high-protein products (Kefir) to up-market consumers who might have lactose intolerance or just enjoy the combination of flavor/nutrition. LWAY has CAGR’d sales at 15% over the past five years and stand to continue to take share from other traditional snacking categories via the advent of GLP-1. GLP-1 users demand higher protein content diets and care more about gut health, leading to expansion for the brand.
The stock has run a bit after Danone got rid of their stake via secondary offering. But it’s not that expensive and growing. Danone gave up on trying to buy out the business from the Smolyansky family. So they might actually try to launch their own product to compete here. That would of course be tough for the brand to deal with competition, but it’s already got the first mover/category owner head start. Maybe the personalities at Danone/Lifeway just clashed too hard, or Danone had different ideas of where to take the brand and wanted more input, but this freed up liquidity for the shares. But they’re out and the family remains in control.
Regardless this isn’t an in-depth pitch— this is the pitch a chartist (a/k/a witch doctor) gives you before invoking the spirits. Gaps get filled, and there’s a big one up at $33.
non-astrologer here :
watching the protein convenience space, everyone seems to be suffering.
durable winner needs superior position in 2, and at least basic competence in all of these :
- access to low cost protein source at scale
- right combo of nutrition,flavor
- distribution
e.g., the milk-based products are dominated by giants like pepsi with superior distribution