Here’s Why Lamb Weston Holdings (LW) Underperformed in Q2

The London Company, an investment management company, released “The London Company Mid Cap Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. US markets posted mixed results in 2024. The portfolio fell 5.9% (6%.0 net) during the quarter compared to a 3.4% decrease for the Russell Midcap Index. Both stock selection and sector exposure led the portfolio to lag relative to the index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

The London Company Mid Cap Strategy highlighted stocks like Lamb Weston Holdings, Inc. (NYSE:LW), in the second quarter 2024 investor letter. Lamb Weston Holdings, Inc. (NYSE:LW) produces, distributes, and markets frozen potato products. The one-month return of Lamb Weston Holdings, Inc. (NYSE:LW) was -26.41%, and its shares lost 42.23% of their value over the last 52 weeks. On August 6, 2024, Lamb Weston Holdings, Inc. (NYSE:LW) stock closed at $57.38 per share with a market capitalization of $8.244 billion.

The London Company Mid Cap Strategy stated the following regarding Lamb Weston Holdings, Inc. (NYSE:LW) in its Q2 2024 investor letter:

“Lamb Weston Holdings, Inc. (NYSE:LW) – LW underperformed the broader market during the quarter due to headwinds from its recent ERP rollout, and a reduction in near term guidance. Investors have overcapacity concerns as volumes at QSRs have slowed. Price elasticity has remained low given the stability in fry attachment rates. Despite the short-term issues, we believe that this is one of the more attractive consumer staple companies with a clean balance sheet and industry-leading growth. We remain attracted to LW’s market share, pricing power, and industry tailwinds.”

Potatoes being sorted on a conveyor belt in a modern packing facility.

Lamb Weston Holdings, Inc. (NYSE:LW) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Lamb Weston Holdings, Inc. (NYSE:LW) at the end of the first quarter which was 46 in the previous quarter. While we acknowledge the potential of Lamb Weston Holdings, Inc. (NYSE:LW) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Lamb Weston Holdings, Inc. (NYSE:LW) and shared the list of best farmland and agriculture stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.