What Happened?

Shares of potato products company Lamb Weston (NYSE:LW) jumped 9.9% in the morning session after the Wall Street Journal reported that activist investor Jana Partners had built a 5% stake while exploring a sale of the company (Lamb Weston).

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What The Market Is Telling Us

Lamb Weston’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 27.8% on the news that the company reported second-quarter earnings results: Its revenue and EPS missed while its full-year earnings forecast fell short of Wall Street's estimates. Management summarized the drivers of the weakness: "Our price/mix results were below our expectations, while market share losses and a slowdown in restaurant traffic in the U.S. and many of our key international markets were greater than we expected. We also incurred losses related to a voluntary product withdrawal." Overall, this was a bad quarter for Lamb Weston.

Lamb Weston is down 26.9% since the beginning of the year, and at $77.86 per share, it is trading 29.2% below its 52-week high of $109.99 from January 2024. Investors who bought $1,000 worth of Lamb Weston’s shares 5 years ago would now be looking at an investment worth $1,012.

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