Lakeland Industries, Inc. LAKE yesterday announced that its board of directors approved an extension of $5 million to its buyback program announced in February. The funding of the buyback is to be done with the company’s available cash.
Lakeland gained 4.7% yesterday, eventually closing the trading session at $23.83.
We believe that the move reflects the company’s shareholder-friendly policies and strong cash position.
Inside the Headlines
Lakeland’s newly approved program authorizes it to repurchase common shares through negotiated or open-market transactions. Notably, prevailing share prices will be applicable for buybacks through open-market transactions. The company can stop with share buybacks at its discretion.
The shares repurchased will act as treasury stocks — to be used for general corporate purposes or utilized for shareholders’ approved employee stock plans.
Lakeland’s share buyback program approved in February authorized it to repurchase $5 million worth of shares. It completed the program in second-quarter fiscal 2022 (ending July 2021), having repurchased 227,454 shares so far in the quarter.
It is worth noting here that Lakeland’s shares outstanding were 8.1 million at the end of first-quarter fiscal 2022 (ended April 2021). Also, its cash and cash equivalents were $60.3 million exiting the said quarter, reflecting a sequential increase of 14.7%. We believe that further improvement in its cash position and financial performances in the quarters ahead will enable the company to reward its shareholders handsomely.
Zacks Rank, Price Performance and Earnings Estimates
Lakeland presently carries a Zacks Rank #3 (Hold). It specializes in making and distributing protective clothing as well as accessories for use in industrial and public markets. Its solid product offerings; exposure in diversified end markets — including construction, steel and chemical; pandemic-induced demand; and focus on innovation are likely to be beneficial in the quarters ahead. However, higher compensation and woes related to foreign currency translation are worrisome for the company.
In the past three months, shares of Lakeland have decreased 15.5% compared with the industry’s growth of 12%.
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The company’s earnings estimates for second-quarter fiscal 2022 are pegged at 43 cents, reflecting a decline of 23.2% from the 60-day-ago figure. Also, the consensus estimate is pegged at $1.83 for fiscal 2022 (ending January 2022) and $2.00 for fiscal 2023 (ending January 2024), reflecting a decline of 7.6% and growth of 2% from the respective 60-day-ago figures.
Lakeland Industries, Inc. Price and Consensus
Lakeland Industries, Inc. price-consensus-chart | Lakeland Industries, Inc. Quote
Other Stocks With Active Buyback Program
Some other stocks in the industry, which are engaged in repurchasing shares, are Brady Corporation BRC, Johnson Controls International plc JCI and Allegion plc ALLE. While both Brady and Johnson Controls currently carry a Zacks Rank #2 (Buy), Allegion carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the first nine months of fiscal 2021 (ended April 2021), Brady repurchased shares worth $3.6 million, while Johnson Controls bought back shares worth $661 million in the first half of fiscal 2021 (ended March 2021). Allegion repurchased $149.7 million worth of shares in first-quarter 2021.
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