Why Lifeway Foods Is Poised to Pull Back

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, dairy products specialist Lifeway Foods has received a distressing two-star ranking.

With that in mind, let's take a closer look at Lifeway, and see what CAPS investors are saying about the stock right now.

Lifeway

 

 

Headquarters (founded)

Morton Grove, Ill. (1986)

Market Cap

$285.4 million

Industry

Packaged foods

Trailing-12-Month Revenue

$86.3 million

Management

CEO Julie Smolyansky (since 2002)

CFO Edward Smolyansky (since 2004)

Return on Equity (average, past 3 years)

11.5%

Cash/Debt

$5.1 million / $5.4 million

Dividend Yield

0.5%

Competitors

Dean Foods 

General Mills 


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 16% of the 61 All-Star members who have rated Lifeway believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, fellow Fool Rich Smith (TMFDitty), touched on the stock's seemingly unsustainable valuation:

I'll take advantage of an unwarranted price spike to short this one [on Thursday]. 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 [free cash flow] is down in comparison with last year's Q1. Time to exit.

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The article Why Lifeway Foods Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Dean Foods Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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