Marol

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  • Cal-Maine Foods: Higher Prices Lead to Higher Profits
    Actually, I see I have already mostly said this on my post on Apr. 14. But while I'm not an expert and you're probably right long term, from what I've read in the articles cited on Marketwatch (at CALM), they've got a ferocious penalty for shorts. Also, rules for cage space for chickens have changed, and much more room is now needed, so production won't ramp up for awhile. Egg prices up far more than 1/3 in the past year. (Worrisome. One of the cheapest proteins generally available, including in the US. People need to eat.)


    On Jul 06 10:27 AM matthew hanson wrote:

    > This stock is destined to fall back down to Earth. I peg fair value
    > at $10-$12. Egg prices move 8% on a 1% reduction in supply, and
    > move 22% on a 2% reduction in supply. The fundamental demand drivers
    > here are nonexistent: egg demand moves upward with population growth
    > in the US, really 1% per year. Organic/cage-free/natu... eggs are
    > still a tiny portion of the overall egg market. Europe and Japan
    > are seeking small amounts of imports due to the cost of grain overseas,
    > but now that corn and soy have moderated somewhat we will see the
    > exports trail off. The long-term average USDA Grade A Large egg
    > price has been wildly volatile from year to year. Look at CALM's
    > stock price on the Atkins run-up in 2003-2004, then look at what
    > happened to egg prices when the chicken farmers oversupplied just
    > by a modest few percent--the price went down 35% in a matter of months,
    > leading CALM to go from a huge profit in 2004 to bleeding losses
    > in 2005 and 2006. This is a very low-margin commodity company that
    > is trading at 3x book value right now. Unlike oil, which has a very
    > fixed supply and huge capex needs, chickens and eggs are "renewed"
    > in a matter of months, and the economics at these egg and corn prices
    > will make a lot of farmers jump back in to the market, thus pushing
    > supply way up and prices down. Model this as a perpetuity using
    > long-term average egg prices and attendant margins and you'll be
    > shocked at how investors can be valuing this stock at more than $10-$12.
    > Respectfully submitted by Matthew Hanson of Twin Cedars Investments,
    > LLC
    Apr 17 23:39 pm |Rating: 0 0 |Link to Comment |View article
  • Cal-Maine Foods: Higher Prices Lead to Higher Profits
    Sorry. Forum's at
    seekingalpha.com/symbo...
    Apr 17 23:34 pm |Rating: 0 0 |Link to Comment |View article
  • Cal-Maine Foods: Higher Prices Lead to Higher Profits
    Mr. Dawson: Please check out the comments on the "forum" -- can you answer my question about Calm falling now despite shorts, or suggest where I can find out more? Thanks!
    Apr 17 23:33 pm |Rating: 0 0 |Link to Comment |View article
  • 3 Reasons to Own Cal-Maine Foods
    See my reply to Matthew Hanson, below.


    On Feb 23 03:53 AM gaucho wrote:

    > I agree I have bought into CALM the PE is way too low and given the
    > % short its movement upwards could quicken. One look at a two week
    > chart shows sevral days upwards followed by several sideways and
    > again several days upwards.
    >
    > A short squeeze is a read possibility unless the shorts starts to
    > print forged shares (naked shorting) iin whch case the supply is
    > infinite. With high dividends that becomes difficult.
    >
    > Companies like DNDN with no dividend have an estimated 200 million
    > naked shares shorted with 89 million shares outstanding. That is
    > what their firts product Provege was postponed by the FDA. Wallstreet
    > corruption not only controls the SEC but also the FDA.
    Apr 17 23:22 pm |Rating: 0 0 |Link to Comment |View article
  • CALM
    Calm has an insane short amount. (See Mktwatch articles.) One commentator said this "should be the mother of all shorts." and since then, they have announced the dates for their amazing dividend, which along with the shorts' penalty (they must pay the dividend to buyer!) is intended to drive out shorters.

    Okay, so WHY is it going down, and fast? Can someone explain? As a holder, I need to know.
    Apr 14 01:12 am |Rating: 0 0 |Link to Comment |View forum topic

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