Lifeway Foods, Inc. (NASDAQ:LWAY)

I don't wish the company ill, but by golly they just are not producing any earnings. $10 is a lot for a $4 stock. In any case, LWAY will underperform the market over the next little while.

Have you tried Kefir? Aside from the dietary benefits, it's actually good, though a bit on the sweet side. Perople in eastern Europe have been drinking Kefir for centuries, and it is starting to get traction here. 2-3 years ago, you were hard pressed to find it in grocery stores, now it is readily available. The main downside is the price. At $2.99-$3.69/ qt you'd better like the stuff. It doesn't spoil ... it's already spoiled milk!

I found an interesting little statistic about the stock..."Lifeway Foods Inc has an Up/Down volume ratio of 1.2 which indicates that volume on up days is exceeding volume on down days. A ratio above 1.0 implies positive demand for shares." This makes a lot of sense and is positive for the stock price. Also, at a 50 day moving volume average of 14,000+, there is no volitility from institutional investors. Another positive is that the family members that started this company 20 years ago, are still involved, and still own 50% of the company. Lifeway has virtually no competition too. I see Lifeway slowly becoming a mainstream staple in the American dairy market. If they can get Wal*Mart to start carrying the product, this stuff will take off. I think the company would benefit by packaging individual "smoothie sized" containers. People might be more inclined to buy something for $0.75/bottle to try it than buy the quarts at a much higher price.

I can see this company as a take over candidate down the road, once the family decides to let go. Good product, good people behind it ... classic MF stuff. I'm betting on Lifeway reaching $15-$17 within the next 2 years.