CALM

[jeff46902]

I've been watching CALM for almost a year now, and it has been sliding down ever since the first of this year.  However, it appears to be bottoming out for the last month.  Do you think this stock is due for a rebound?

Thanks,
Jeff

[ramlau]

I have won and lost money with CALM. The stock is so 2003 and it's essentially dead. I'd say stay away from it, unless you are really running out of stocks on your list.

Similar stories include CYD, MIKR, FRD, ESMC, HRT... I can name a bunch of old pumps like them.

Ram

[REALDEALS21]

Anyone in ESMC ? Nice run today !

[REALDEALS21]

Nice 3 WHITE soliders !!!!!

[BigSully1]

My wife has been buying Eggland's Best for awhile now, as they are now only about .40/dozen higher than regular eggs, at about $2.60/dozen. She told me I should buy the stock, I should have listened.
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Cal-Maine Foods, Inc. Reports Second Quarter Fiscal 2008 Results
Friday December 28, 7:00 am ET


JACKSON, Miss.--(BUSINESS WIRE)--Cal-Maine Foods, Inc. (NASDAQ: CALM - News) today announced results for the second quarter and six months ended December 1, 2007.
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Net sales for the second quarter of fiscal 2008 were $223.7 million compared with net sales of $137.7 million for the same quarter of fiscal 2007. The Company reported net income of $40.2 million, or $1.70 per basic share, for the second quarter of fiscal 2008 compared with net income of $6.4 million, or $0.27 per basic share, for the second quarter of fiscal 2007.

For the first six months of fiscal 2008, net sales were $402.3 million compared with net sales of $253.0 million for the prior-year period. The Company reported net income of $58.1 million, or $2.46 per basic share, for the first half of fiscal 2008 compared with net income of $970,000, or $0.04 per basic share, for the year-earlier period.

Fred Adams, Jr., chairman and chief executive officer of Cal-Maine Foods, Inc., stated, "We are very pleased with our results for the second quarter of fiscal 2008. These results reflect the favorable market conditions, with egg prices reaching record levels during the quarter. All of our operations performed well during the period. The egg industry has received positive reports from both the medical and nutritional communities, and eggs continue to represent a good value compared with other food products. As a result, demand for fresh eggs was strong for both the retail and food service markets as well as demand for eggs used for liquid, frozen and dried egg products. The export markets have also been very strong this year, and we expect Europe, the United Kingdom, Japan and the Middle East to be good markets for eggs in 2008.

"Looking ahead, our feed costs remain high, and we expect this trend to continue with the high demand for corn for ethanol use creating additional price pressures. However, both the egg industry and the USDA predict that egg production will be similar to 2007 levels, and this should support profitable egg prices for the year ahead," added Adams.

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs. The Company, which is headquartered in Jackson, Mississippi, currently is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 29 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.

Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties (contained in the Company's SEC filings) that could cause actual results to differ materially from those projected. SEC filings may be obtained from the SEC or by contacting the Company.

CAL-MAINE FOODS, INC. AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS

(Unaudited)

(In thousands, except per share amounts)

         
  13 Weeks Ended   26 Weeks Ended 
  Dec. 1,
    Dec. 2,   Dec. 1,     Dec. 2, 
  2007   2006      2007   2006     
Net sales   $  223,696   $  137,737    $  402,294   $  253,045   
Gross profit    76,032    24,955     121,612    33,362   
Operating income    59,003    10,497     85,935    4,434   
Other income (expense)    2,367    (940  )    2,658    (2,878  ) 
Income before income taxes    61,370    9,557     88,593    1,556   
     
Net income   $  40,154   $  6,401    $  58,120   $  970   
     
Net income per common share:         
Basic   $  1.70   $  0.27    $  2.46   $  0.04   
Diluted   $  1.69   $  0.27    $  2.45   $  0.04   
     
Weighted average shares outstanding:         
Basic    23,681    23,503     23,640    23,503   
Diluted    23,714    23,597     23,719    23,596   
     SUMMARY BALANCE SHEET

(Unaudited)

(In thousands)

         
  Dec. 1,
  June 2,

ASSETS   2007   2007 
Cash and short-term investments   $  87,785   $  54,532 
Receivables    68,888    38,180 
Inventories    69,403    62,208 
Other      881      1,390 
Current assets    226,957    156,310 
         
Property, plant and equipment (net)    200,499    193,590 
Other assets      21,564      14,668 
Total assets   $  449,020   $  364,568 
   
LIABILITIES AND SHAREHOLDERS' EQUITY     
Accounts payable and accrued expenses   $  75,581   $  45,051 
Other current liabilities    10,758    5,435 
Current maturities of long-term debt    11,661    13,442 
Deferred income taxes      12,136      11,830 
Current liabilities    110,136    75,758 
         
Deferred income taxes and other liabilities    32,403    33,661 
Long-term debt, less current maturities    92,572    99,410 
Shareholders' equity      213,910      155,739 
Total liabilities and shareholders' equity   $  449,020   $  364,568 

-----------------------------------------------------------------------------------

http://stockcharts.com/h-sc/ui?s=CALM&p=D&b=5&g=0&id=p59191861522

[kslifka]

Can someone explain why CALM had such a rotten day after blow-out earnings.

[swinger33]

Hi, everybody! It´s my first post here and a real pleasure to me as this is a high quality forum.

You only have to forgive my poor English. 

So, kslifka, I think the answer to your question is not dificult:

1. First, it was really too much that open and high. But the volume is there (4,45M), by far the highest for at least 3 years.

2. Second, if you look closely today´candle is all well outside Bollinger Bands.

3. And don´t forget that in 2007 the price of CALM climbed almost four times, from around 8 to a high of 31.45!

4. I think there is plenty of room to the stock to reach new highs soon (today made a higher high anyway...)

5. MACD and RSI both assure that we may have a very good upside in front of us.

Cheers,
Swinger

Chart courtesy of http://stockcharts.com

[kslifka]

Hi, everybody! It´s my first post here and a real pleasure to me as this is a high quality forum.

You only have to forgive my poor English. 

So, kslifka, I think the answer to your question is not dificult:

1. First, it was really too much that open and high. But the volume is there (4,45M), by far the highest for at least 3 years.

2. Second, if you look closely today´candle is all well outside Bollinger Bands.

3. And don´t forget that in 2007 the price of CALM climbed almost four times, from around 8 to a high of 31.45!

4. I think there is plenty of room to the stock to reach new highs soon (today made a higher high anyway...)

5. MACD and RSI both assure that we may have a very good upside in front of us.

Cheers,
Swinger

Chart courtesy of http://stockcharts.com

Swinger...welcome to 3sof and thanks for your input.

As we know...a stock can trade well outside the bollinger band...especially after positive earnings.  I really don't like black candles especially on high volume.

You're right CALM did rise a lot this year...and we may have some selling the news.

I'm more interested in learning what type of earnings release results in a nice white candle.  I saw nothing but good things from CALM's earnings report....unless the street is thinking the growth has maxed out.

Comments welcomed...I really want to learn how to trade after earnings reports.

[BigSully1]

Yeah, I think swinger33's answer is better than any I could possibly give at the moment. (By the way swinger, your English is near impeccable, welcome to the board,, applaud and looking forward to more of your posts.)

CALM is still heavily shorted. Maybe they went in even deeper today instead of covering?

[BigSully1]

Part of it might have been this comment from the CEO describing costs, wasn't exactly the most bullish.

"Looking ahead, our feed costs remain high, and we expect this trend to continue with the high demand for corn for ethanol use creating additional price pressures. However, both the egg industry and the USDA predict that egg production will be similar to 2007 levels, and this should support profitable egg prices for the year ahead," added Adams.
------------------------------------------------

I would think that now that the big price gap has greatly narrowed between ordinary eggs and Eggland's best, CALM would have pricing power to increase prices. The wife corrected me on the price difference though. Last time she was at the store, regular eggs had risen to about $2.00/dozen and Eggland's best were still about $2.60, about the same as they have been for a long time. Still a nickel an egg is very little to pay for an egg that tastes better and is supposed to be much more healthy. Time to raise the prices on Eggland's Best.

[swinger33]

Thank you, kslifka and BigSully1! I feel at home here that´s for sure: this site is doing a great job and an excellent performance and the members I have read so far are great, with excellent technical quality.

Now, another post about this CALM company, which is really a case study.

"Cal-Maine's operating results are significantly affected by wholesale shell egg market prices, which fluctuate widely and are outside of our control.  Small increases in production or small decreases in demand can have a large adverse effect on shell egg prices.  Burt shell egg prices have experienced an upward trend since 2002." 

Retail sales of shell eggs are greatest during the fall and winter months and lowest during the summer months. Prices for shell eggs fluctuate in response to seasonal factors and a natural increase in shell egg production during the spring and early summer.  Shell egg prices tend to increase with the start of the school year and are highest prior to holiday periods, particularly Thanksgiving, Christmas and Easter.  Consequently, we generally experience lower sales and net income in our first and fourth fiscal quarters ending in August and May, respectively."
 
So, we are now analyzing a "good" quarter as should be also the next one. And don´t forget that CALM has a growth strategy trough acquisitions and production of value added specialty shell eggs.

As the company is doing business for many years it is fantastic the growth level obtained on the quarter ended December 1, 2007. Net sales of $223.7 M, 78% more than same quarter last year, and net profits of $40.2M ($1.69/share) - almost seven times more than a year ago.

Costs rise on the last 12 months but gross profit rose much more and it seems that it will happen again in the future through growth and normal pricing power of the company.

The average P/E of the sector is 18.85 and if we work with half (let´s say 9) it is clear that CALM is worth at least 60. In fact, from here and even not considering growth as we are in a strong quarter, we have 1.69 x 4 x 9 = 60.84.

I think CALM will go there, as those white candles will arrive soon but ... calmly, in a sustainable way, which is better than too quickly.

Though it is not a company so up-to-date as solar energy, internet innovation and so on, I would consider it very solid and if the United States are headed for a slowdown (or light recession?) here we have a company that will suffer much less than average.

What do you think?

Regards
swinger

[BigSully1]

Thanks for the informative posts. Sounds like you have a pretty good handle on them. For now, I'll keep on watch until I get a better handle on the price action.

My wife went shopping again Saturday night and was disappointed to find Eggland's Best sold out.  She had to resort to buying the lowly regular eggs.

[swinger33]

Let´s go back to CALM short position.

For me, as an investor who sees great upside potential on CALM prices, the fact that this stock is heavily shorted is very good as fundamentals are great and a squeeze is very likely. I am only puzzeled about the short term as the shorts should be covering. We are talking about some 6.6 million short shares in December with total value of around $180M (more than 40% of float). I think something is very wrong here.

[BigSully1]

Starting to look much better now. I should have bottom fished it, but had too much going on.

[BigSully1]

update