Leading Brands, Inc (USA) (NASDAQ:LBIX)
Shares of Leading Brands, Inc (USA) (NASDAQ:LBIX) are up over 50% and reversing the stock’s ten day decline following the company’s earnings announcement for Q2 2017. Observers believe the market is viewing the previous sell-off as overdone. Investors are buying in abnormally large quantities and the stock’s volume is on pace to register a number 20 times the listed daily average.
Leading Brands, Inc (USA) (NASDAQ:LBIX), headquartered in Vancouver, BC, Canada, and its subsidiaries develop, market, and distribute their own line of branded beverage products. These include TrueBlue, PureBlue, and LiveHappy Water.
Leading Brands Q2 Earnings
On October 16, 2017 Leading Brands, Inc (USA) (NASDAQ:LBIX) announced a $710,000 (-$0.25 per share) net loss from continuing operations versus a net loss of $949,000 (or $0.33 per share) in Q2 2016. Gross revenue for continuing operations for Q2 2017 was $510,000, versus $568,000 in the comparable period of last year. Gross profit margin for the quarter was 0.7%, up from (9.1%) in the same quarter last year.
LBIX Stock Reaction
On October 10, 2017, investors began accumulating shares, reportedly in anticipation of the earnings announcement. Shares boomed from $0.84 to $3.75 on October 13. The day of the announcement, shares reached $3.20 but closed at $2.82.
The failure to sustain the share increase led to a continuous decline. By October 31, LBIX stock hit a daily low of $1.30 – a 65% drop from its October 13 high. But today, investors jumped in and sent LBIX shares back up. They opened at $1.49 and have hit an inter-day high of $2.52. LBIX stock is trading around $2.25 at the time of this writing (11:52 AM EST).
Leading Brands Sales and Earnings History
In 2013, the company posted a per share profit of $0.15 and followed it up the next year with a figure of $0.31. Unfortunately, the next three years have seen losses. For 2015 the per share loss was (-$1.02), then a loss of (-$1.06) for 2016, and a loss of (-$0.86) for FY2017.
Sales have suffered as well. In 2013 sales were reported at $13.4 million and 2014 saw sales of $11.9 million. But in 2015 sales were just $400,000, then the next year just $600,000, and $900,000 for FY2017.
The one-year consensus price target amongst analysts is $4.40.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.