Lamb Weston Acquires Marvel, Enhances Global Capabilities

In a bid to enhance its global capabilities, Lamb Weston Holdings, Inc.LW acquired Marvel Packers Pty Ltd (Marvel) - a frozen potato processor in Australia. This operator of frozen potato processing and storage facilities in Hallam, Victoria improves Lamb Weston's global production capacity by about 50 million pounds.

Taking into account this latest buyout, Lamb Weston will own and operate 16 processing facilities internationally, and an additional nine facilities in collaboration with its joint venture partners. This acquisition not only opens up new avenues but also provides an opportunity to tap Australia's 1.1-billion-pound market.

Lamb Weston's focus on its strategic growth initiatives via constant investments in enhancing capacity, improvement of customer services, innovations and increased limited time offerings is an added positive. It also expects continued robust demand for frozen potato products and a tight production capacity in the current fiscal year.

Although management anticipates to face hurdles like a poor potato crop at its European joint venture, Lamb Weston/Meijer, it expects to offset these challenges with solid pricing and cost-saving initiatives as well as opportunities in its North American and export ventures. All said, the company is well positioned to achieve its fiscal 2019 goals. Backed by strong price/mix in the first half of the fiscal, management expects net sales to increase mid-single digits.

Furthermore, Lamb Weston's top line has been gaining from robust price/mix. This is quite evident from the fact that this drove sales across all segments in the first quarter of fiscal 2019. Notably, Lamb Weston's sales grew on the back of an 8% rise in price/mix.

In the past three months, shares of this Zacks Rank #2 (Buy) company have gained roughly 10% against its industry 's 13.7% decline.

3 Stocks to Watch

The Chefs' Warehouse CHEF delivered average positive earnings surprise of 54.7% in the trailing four quarters. It has a long-term earnings growth rate of 19% and a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Campbell Soup Company CPB delivered average positive earnings surprise of 13.7% in the trailing four quarters and carries a Zacks Rank of 2.

McCormick & Company, Incorporated MKC has a long-term earnings growth rate of 9% and a Zacks Rank #2.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Campbell Soup Company (CPB): Free Stock Analysis Report

McCormick & Company, Incorporated (MKC): Free Stock Analysis Report

Lamb Weston Holdings Inc. (LW): Free Stock Analysis Report

The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.