Lamb Weston Stock Rides A 5-Day Winning Streak To A 20% Gain
Shares of Lamb Weston (LW) have closed higher in each of the last 5 sessions, a cumulative gain of 20.1%. That added about $1.1 billion to the company’s market value, which now stands at about $6.8 billion. The stock closed at $49.46 on Thursday, October 8, 23.4% below its 52-week high of $64.57 and 30.6% above its low of $37.86.
How The Streak Stacks Up Against The S&P 500
Returns for LW and the S&P 500 over the streak and the periods around it, all ending Thursday, October 8 and including dividends:
| Return Period | LW | S&P 500 |
|---|---|---|
| 1 Day | 2.8% | -0.5% |
| 5 Days (Current Streak) | 20.1% | 1.3% |
| 1 Month (21 Trading Days) | 2.8% | 1.8% |
| 3 Months (63 Trading Days) | 7.3% | 2.8% |
| Year To Date | 21.0% | 14.4% |
| 1 Year (252 Trading Days) | -19.5% | 17.0% |
A Stock-Specific Run, Or A Market Move?
The market explains little of this: the S&P 500 gained 1.3% over the same 5 sessions, including dividends, against Lamb Weston’s +20.1%. Over the past three months the stock is up 7.3%, a window that includes the streak; over the other 58 sessions of that window it was down 10.7%.
What The Numbers Say About The Rally
On the fundamentals, revenue grew 2.6% over the last twelve months, against a median of 4.8% for S&P 500 Consumer Staples stocks; its operating margin is 9.1%, versus a median of 15.2%; and the stock trades at 26.7 times trailing earnings against a median of 22.6. The read is mixed.
A climb like this is worth respecting, and worth testing. Our Guidance Momentum screen tracks the stocks whose companies just raised their own forward numbers.
For anyone who would rather back the theme than one company, a consumer staples ETF like XLP holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.
One Hot Stock Is A Story. Thirty Sound Ones Are A Strategy
A streak like this earns a place on your watchlist, and it also earns a question: how much of your outcome do you want depending on one company keeping this up?
The Trefis High Quality (HQ) Portfolio answers it with breadth: roughly 30 businesses picked for consistent cash generation, strong margins, and balance-sheet strength, sized and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Follow the story; invest in the strategy.