Jana pushes for a takeover

Article Excerpt

LAMB WESTON HOLDINGS INC. $76 is a buy. The company (New York symbol LW; Consumer sector; Shares outstanding: 142.6 million; Market cap: $10.8 billion; Dividend yield: 1.9%; Takeover Target Rating: Highest; www.lambweston.com) is a leading producer of frozen french fries, potatoes and other packaged vegetables. Lamb Weston’s sales and earnings have suffered lately as cost-conscious consumers make fewer trips to fast-food restaurants in an effort to cope with higher inflation and interest rates. Consumers are also spending less on frozen potato products. Activist investment firm Jana Partners recently announced that it now owns 5% of the company. Jana wants Lamb Weston to conduct a strategic review of its operations. That could lead to a sale of the entire company. Even if a sale fails to materialize, Jana’s involvement helps draws investor attention to the company’s high-quality assets. Lamb Weston is still a buy. buy…