Lifeway Foods, Inc. (NASDAQ:LWAY)

I'll take advantage of an unwarranted price spike to short this one today. LWAY is a great company, but it's just reneged on a commitment to not spend money on expanding capacity, buying a plant to quadruple capacity instead. And FCF is down in comparison with last year's Q1. Time to exit.

The team at LifeWay are aggressive marketers and continue to innovate product offerings off of their core. In see them as a near term acquisition for a larger fish. I use the product and can attest to the benefits of probiotics.

Too expensive relative to peers

Have you tried Kefir? Aside from the dietary benefits, it's actually good, though a bit on the sweet side. Perople in eastern Europe have been drinking Kefir for centuries, and it is starting to get traction here. 2-3 years ago, you were hard pressed to find it in grocery stores, now it is readily available. The main downside is the price. At $2.99-$3.69/ qt you'd better like the stuff. It doesn't spoil ... it's already spoiled milk!

I found an interesting little statistic about the stock..."Lifeway Foods Inc has an Up/Down volume ratio of 1.2 which indicates that volume on up days is exceeding volume on down days. A ratio above 1.0 implies positive demand for shares." This makes a lot of sense and is positive for the stock price. Also, at a 50 day moving volume average of 14,000+, there is no volitility from institutional investors. Another positive is that the family members that started this company 20 years ago, are still involved, and still own 50% of the company. Lifeway has virtually no competition too. I see Lifeway slowly becoming a mainstream staple in the American dairy market. If they can get Wal*Mart to start carrying the product, this stuff will take off. I think the company would benefit by packaging individual "smoothie sized" containers. People might be more inclined to buy something for $0.75/bottle to try it than buy the quarts at a much higher price.

I can see this company as a take over candidate down the road, once the family decides to let go. Good product, good people behind it ... classic MF stuff. I'm betting on Lifeway reaching $15-$17 within the next 2 years.

Been a great stock and still will be.

pretty volatile stock, I would never actually put money into this one but i like its chances to recover close to where it was around june and august

The price of milk is down and will remain down and the demand for this company's product will continue to grow due to it's health benefits.

Growing company in a growing niche. Aquisitions as well as increased demand for healthier food should allow for increased growth coming out of the recession. This company is also positioned well to finance such acquisitions.

Lifeway is an interesting small cap growth stock to follow with impressive sales & profits growth. Their net income has been steadily climbing & their success at market penetration shows a strength.

While their product lines are not that diversified, the key component is that they are benefiting from the double-digit percentage rise annually in yogurt industry sales dollars in the U.S. (multi-billion) as consumer's progressively become more health conscious. When Dannon runs their advertisements on the television for Activia for it's probiotic health benefits, Lifeway rides the cash wave. During a recession, it's staple goods that prove most resilent--when you can't go on vacation to the Fiji Islands, you go for comfort foods.

60% of Americans are overweight where these consumers are looking for healthy alternatives to their family's diet.

The expansion of distribution channels to multiple regional areas with giants Safeway, Kroger, and Costco should add several million in sales and also generate heightened consumer awareness. After all, with the exception of Kroger, Safeway is #2 and Costco #4 (bigger than Target Greatland Stores).

One misunderstood yet highly profitable market segment in ethnographic marketing is the East Indian community. I applaud Lifeway for going after this segment with their Lassi line which is very popular in this culture yet virtually unavailable on the shelves even in some ethnic grocers.

Final comment I'd add is that for a small outfit where their primary target customer is very loyal yet inquisitive, their website is informative and user-friendly.

Expect a surprise in earnings or you're the Fool.

Decelerating revenue growth, decreasing margins. Niche product that would be easy to cut of your personal budget when times get tough. Plus it's currently trading at the upper end of its P/E range

This company pretty much feeds the entire American hunger for kefir. They recenty aquired thier closest competition, Helios Nutrition and it's a family ran business. I've been following this one for a while, and I like Lifeway. I think it's a safer bet during these unpredictable times.

Based on management guidance for 1Q08, a sales run rate approaching $1 million a week, moderation of milk prices, and increased consumer awareness of LWAY offerings, we're [increasing forecasts for] revenue of $49.935 million (formerly $48.5 million); and net income of $4.1 million or 24 cents a share (versus $3.8 million/23 cents). We expect 2H results to improve over 1H. Target: 13.65. Market cap: $203 million.

http://online.barrons.com/article/SB120855875704427677.html?...

pro biotics, pro lifeway

Health fad should hold for at least another year, and the Dairy council will only promote harder.

down $2 to $10

Strong company in a strong industry looks to peak around $26 I believe

Like the stats!

food and diary, hot industry
money flow in, just off the base (normal retraction from the hike.)
FA is ok, growth stock with small cap, 300 mil

A Fad Food for now, but one with definate health benefits, fitting into that class of products that may serve those with certain dairy allergies! Also, parents looking to feed "good stuff" to their kids and still treat them to dessert will use it! I've tried it, and it isn't bad either.