Several big names in agriculture and the food industry are set to report quarterly numbers this week.
It’s early in this earnings season, but these reports give us a good idea of how inflation affects food prices.
We’ll look at Lindsay Corp. (NYSE: LNN), an irrigation and infrastructure company, and Landec Corp. (Nasdaq: LNDC), a packaged foods company.
Let’s look at what we can expect from our two food-related stocks this week…
Earnings Edge Stock No. 1: Lindsay Corp. (NYSE: LNN)
Earnings Announcement Date: Tuesday, before the open.
Expectations: Earnings at $1.20 per share. Revenue at $187 million.
Average Analyst Rating: Hold.
Lindsay Corp. has two main segments, irrigation and infrastructure. The irrigation segment relates to farming as Lindsay needs advanced irrigation systems to maintain production.
This made up 83% of its sales last year, so it’s the key one to watch.
This quarter tends to be one of its highest revenue quarters, tied with the next quarter. So, it’s a pivotal earnings announcement that not only looks back over the past few months but can tell us what LNN is seeing in the current quarter as well.
Investors are bullish on LNN right now. Shares have bounced 30% higher in the last two months.
LNN’s Bullish Bounce
Earnings Edge Stock No. 2: Landec Corp. (Nasdaq: LNDC)
Earnings Announcement Date: Tuesday, after the close.
Expectations: Earnings at $0 per share. Revenue at $48.41 million.
Average Analyst Rating: Outperform.
Landec is a unique packaged foods company, focusing on the healthier side of things with salads and veggies.
These items are hot commodities in a normal environment, but with rising inflation pushing costs higher, will consumers still flock to the healthier side of things or eventually switch to more processed foods which would be cheaper?
The reality is that it hasn’t played out yet. It’s a bit too soon for consumers to react.
But we know surging prices in everything are putting a pinch on an otherwise healthy consumer market.
So, each quarter will be viewed under a microscope to see if companies like Landec are losing any ground.
It had a solid performance last quarter, which helped LNDC rise more than 10% on earnings. While that means little for the current quarter, it was great to see the stock build.
LNDC Could Break Resistance on Earnings
Since earnings last December, shares have been trending higher, making higher highs and higher lows since then, as indicated by the trend lines on the chart (green shows the support level and red shows the resistance level).
Right now, we are smack dab in the middle.
That’s a tough spot to trade because it could drop or rally on earnings and still be in an uptrend.
I’m not looking for a breakout this week, but I do expect the stock to continue climbing higher from here. If we get a drop on earnings, but the stock stays above that green support, use it as a buying opportunity.
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