Cal-Maine Foods (CALM): Today's Weak On High Volume Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
(
) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Cal-Maine Foods as such a stock due to the following factors:
- CALM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $19.1 million.
- CALM has traded 71,469 shares today.
- CALM is trading at 5.08 times the normal volume for the stock at this time of day.
- CALM is trading at a new low 3.25% below yesterday's close.
'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.
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More details on CALM:
Cal-Maine Foods, Inc. produces, grades, packages, markets, and distributes shell eggs. The stock currently has a dividend yield of 2.6%. CALM has a PE ratio of 13.5. Currently there are no analysts that rate Cal-Maine Foods a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Cal-Maine Foods has been 420,100 shares per day over the past 30 days. Cal-Maine has a market cap of $1.7 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.57 and a short float of 25.3% with 12.12 days to cover. Shares are up 0.1% year-to-date as of the close of trading on Friday.
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Analysis:
rates Cal-Maine Foods as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.1%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CALM's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CALM has a quick ratio of 2.28, which demonstrates the ability of the company to cover short-term liquidity needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Food Products industry and the overall market, CAL-MAINE FOODS INC's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 40.74% and other important driving factors, this stock has surged by 34.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- You can view the full Cal-Maine Foods Ratings Report.
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