Perilous Reversal Stock: Cal-Maine Foods (CALM)

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 Cal-Maine Foods ( CALM) as a "perilous reversal" (up big yesterday but down big today) 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 $80.8 million.
  • CALM has traded 1.3 million shares today.
  • CALM is down 3% today.
  • CALM was up 8.9% yesterday.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CALM with the Ticky from Trade-Ideas. See the FREE profile for CALM NOW at Trade-Ideas

More details on CALM:

Cal-Maine Foods, Inc. produces, grades, packages, markets, and distributes shell eggs. The stock currently has a dividend yield of 2.5%. CALM has a PE ratio of 18. 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 640,000 shares per day over the past 30 days. Cal-Maine has a market cap of $2.4 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 1.50 and a short float of 31.6% with 5.86 days to cover. Shares are up 53.4% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cal-Maine Foods as a buy. 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, attractive valuation levels and solid stock price performance. We feel its 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 10.8%. Since the same quarter one year prior, revenues rose by 10.6%. 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 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.53, which clearly demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. 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.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 76.85% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CALM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%

Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%

Video: Stop Using Student Loan Money to Buy Bitcoin

Video: Stop Using Student Loan Money to Buy Bitcoin

Let the Najarian Brothers Crash-Proof Portfolio

Let the Najarian Brothers Crash-Proof Portfolio