We're posting up notes from the Sohn New York Investment Conference. Next up is the Sohn idea contest winner who presented a short of Lamb Weston (LW).
Sohn Idea Contest Winner: Short Lamb Weston
• Lamb Weston(LW) – (Short idea) Lamb will miss estimates by 30% to 40% in next few years as margins are at peak.
o Buys potatoes and sells them as french fries to restaurants.
o Lots of new supply coming online. Was an unexpected boom in demand which sent margins in the business way up but a supply response is coming
o People don’t realize that their current pricing power is cyclical and not secular. Stock is priced like a consumer staple
o Would cost $5 billion to recreate Lamb’s assets. Company's EV is well more than double that
Be sure to check out the rest of the Sohn New York conference presentations.
Tuesday, May 7, 2019
Sohn New York Idea Contest Winner: Short Lamb Weston
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