Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

2

Why Cal-Maine Shares Cracked

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cal-Maine Foods (NASDAQ: CALM  ) plunged 10% today after the egg producer's quarterly profit easily missed Wall Street expectations.

So what: Cal-Maine's second-quarter revenue jumped 9.1% on higher selling prices, but a big miss on the bottom line -- EPS of $0.60 versus the consensus of $0.90 -- reinforces concerns over spiking feed costs. In fact, gross margins fell to 15.6% from 21.2% in the year-ago period, forcing analysts to lower their valuation estimates.

Now what: Unfortunately, management expects feed costs to remain high and volatile for the remainder of the year. "While we note these market dynamics for Cal-Maine Foods and our industry, we remain focused on executing our strategy to be an efficient low-cost producer," CEO Dolph Baker reassured investors in a statement. So while high input costs will continue to pressure margins in the short term, Cal-Maine's scale advantages, coupled with the increasing demand for specialty eggs, make today's pullback a tasty long-term opportunity.

Interested in more info on Cal-Maine? Add it to your watchlist.


Read/Post Comments (0) | Recommend This Article (2)

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2173765, ~/Articles/ArticleHandler.aspx, 9/25/2016 11:40:35 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
CALM $42.17 Down -0.04 -0.09%
Cal-Maine Foods CAPS Rating: ****