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The latest data shows signs of inflation cooling down. The food index increased 0.6% sequentially in October after a 0.8% increase in September. The food-at-home index rose 0.4% in October, registering the smallest monthly increase since December 2021.
Source: Trading Economics

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Over the recent past, packaged foods have grown in significance due to their easy-to-handle characteristics and hygienic properties. The global packaged food market is expected to reach $4.11 trillion by 2028, growing at a 4.5% CAGR. The market is also concurrently witnessing increased consumption of dairy products.
Packaged food company Lifeway Foods, Inc. (LWAY) produces and markets probiotic-based products internationally. Its primary product is drinkable kefir, a cultured dairy product. The company sells its products under the Lifeway and Fresh Made brand names and private labels.

The stock has gained 34.9% over the past year and 54.6% year-to-date to close its last trading session at $7.11. It is up 29.5% over the past month.
Source: TradingView
Here are the factors that could influence LWAY’s performance in the upcoming months:
Probiotics Market Growth
Probiotics are microbial species that support intestinal health in humans and animals. As consumers become more and more health conscious, the probiotics market is expected to expand. The global probiotics market is projected to reach $74 billion by 2030, expanding at 8.5% CAGR.
Solid Financials
For the fiscal third quarter that ended September 30, LWAY’s net sales increased 29.1% year-over-year to $38.14 million. Julie Smolyansky, LWAY’s President and Chief Executive Officer, attributed this quarter’s results to its core Lifeway Kefir business.
Its gross profit rose 8.5% from the prior-year quarter to $7.59 million. Its net income improved 104.8% year-over-year to $983 thousand. Its earnings per common share came in at $0.06, up 100% from the prior-year period.
Mixed Valuation
Regarding its forward P/E, LWAY is trading at 88.88x, 317% higher than the industry average of 21.31x. The stock’s forward EV/EBIT multiple of 61.61 is 281.9% higher than the industry average of 16.13.
On the other hand, in terms of forward EV/Sales, it is trading at 0.75x, 55.4% lower than the industry average of 1.67x. Its forward Price/Sales multiple of 0.76 is 36.5% lower than the industry average of 1.20.
Favorable Analyst Estimates for Next Year
The consensus EPS estimate of $0.38 for the next year (fiscal 2023) indicates a 375% year-over-year improvement. Likewise, the consensus revenue estimate for the same year of $152 million reflects an increase of 5% from the prior year. Analysts expect LWAY’s EPS to grow 10% per annum over the next five years.
Technical Indicators Look Promising
MarketClub’s Trade Triangles show that LWAY has been trending UP for two of three periods. The long-term trend has been UP since August 12, 2022, and the intermediate-term trend has been UP since November 7, 2022. However, the short-term trend has been DOWN since November 23, 2022.
Source: MarketClub
The Trade Triangles are our proprietary indicators, comprised of weighted factors that include (but are not necessarily limited to) price change, percentage change, moving averages, and new highs/lows. The Trade Triangles point in the direction of short-term, intermediate, and long-term trends, looking for periods of alignment and, therefore, strong swings in price.

In terms of the Chart Analysis Score, another MarketClub proprietary tool, LWAY scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend). This indicates short-term weakness, but traders could look for the longer-term bullish trend to resume. Traders should continue to monitor the trend score and utilize a stop order.

Click here to see the latest Score and Signals for LWAY.
What’s Next for Lifeway Foods, Inc. (LWAY)?
Remember, the markets move fast and things may quickly change for this stock. Our MarketClub members have access to entry and exit signals so they’ll know when the trend starts to reverse.
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Best,The MarketClub Team[email protected]

The market rally during the shortened holiday trading week of November 21st-25th should not be trusted just yet.
The Dow Jones Industrial Average rose 1.78% during the week, the S&P 500 increased by 1.53%, and the technology-heavy NASDAQ grew by 0.72%.
The move higher came for several reasons, but none materially changed the economy’s outlook over the coming six to twelve months.
The biggest news was from the Federal Reserve. The Fed’s meeting minutes from their November 1st and 2nd meeting pushed prices higher after several Fed members expressed interest in slowing the pace of rate hikes during future meetings.

Just the fact that the Fed is talking about reducing the amount of their rate increases is significant, and many economists applaud this move. Economists are happy with this because the Feds policy changes have a lag, meaning it takes time for rate increases to show in economic data reports.
The concern has been the Fed is raising rates too quickly, and by the time the lag sets in, the economy will be in the dumps. So, slowing the pace today is a possible way the Fed can avoid running the economy into the ground. Not running the economy into the ground is the “soft landing” we often hear about when people refer to the Fed and its current policies.
Another catalyst for the recent move higher was the Consumer Price Index in October, which was up 7.7% from a year ago. This was the lowest CPI reading increase since January of this year. But, let’s be honest, a 7.7% increase year-over-year is still ridiculously high inflation.
However, many economists are actually saying they are seeing inflation leveling out. We aren’t yet seeing that happen with the CPI numbers because we are still looking at year-over-year comparables before inflation got out of control.
The true sign that inflation has slowed, or is still climbing, will be in 2023 when we see year-over-year comps comparing current inflation measures with the elevated inflation we began seeing in early 2022.
Despite all the optimistic news investors got over the last few weeks, when reality sets in, it is easy to see that neither the US economy nor the world economy is very healthy.
Central bankers of every developed country in the world are raising interest rates.
The US dollar is way stronger year-over-year when compared to nearly every major currency, which is not great for the world economy.
GDP growth rates are missing expectations and slowing from where they were a year ago.
And let’s not forget Russia and Ukraine are still at war, causing major concerns to the energy markets and the possibility that parts of Europe will run out of natural gas during the coming winter months.
The possible energy crisis and the fact that Ukraine is a major world exporter of grains and other crops is not something that bodes well for lowering inflation in the short term.
Furthermore, we also are seeing Covid-19 cases in China, which is causing factories and even whole cities to go into lockdown.
Many economists believe that a large portion of the inflation we are currently experiencing is due to the supply chain issues we saw happening during the beginning of the pandemic. Therefore factories shutting down again all across China is not likely something that will help slow inflation.
Finally, let’s not forget. The Federal Reserve members were talking about “slowing” rate hikes, not yet actually slowing them. And they aren’t even starting to talk about stopping them. Let alone reverse interest rates and move them lower. While slowing rate increases is the first sign that inflation may be slowing, we still have a long ways to go until any potential recession or major economic slowdown is in the rearview mirror.
Correct me if I am wrong, but that still doesn’t sound very good. It does sound better than before, but not what I would call a good, healthy economy.
I know it sounds like a broken record to say, “there are a lot of negative market headwinds, and therefore you should wait until the dust settles to buy.” But I don’t understand why people are in such a hurry to buy the dip and call this the bottom.

If you are in such a rush, can’t control your FOMO, and must buy into this market, buy small amounts and cost average over the next 12 months. Paying a few dollars more for something in a few months, if this is the bottom, is not going to destroy your investment return. But it could keep you from losing money because this is a fake rally, and the market rolls over again in 2023.
A few personal favorites if you want to start buying today are the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV), or the Invesco QQQ Trust (QQQ) over the next 12 months and don’t try to time the market bottom.
Remember, you are investing for decades, so in the long run, the difference between buying today and six months from now won’t make that much of a difference to your portfolio two decades from now.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.