Returns Breakdown
0.0725
Return On Tangible Assets
0.07
Return On Assets
0.11
Return On Equity
| Return On Tangible Assets | 0.0725 | |
| Return On Capital Employed | 0.12 | |
| Return On Assets | 0.07 | |
| Return On Equity | 0.11 |
Should you continue to rely on Cal Maine (USA Stocks:CALM) management?
 | By Vlad Skutelnik | Macroaxis Story |
As the saying goes, the proof of the pudding is in the eating. The same can be said for the stock market, where the true test of a company's worth lies in its performance. This holds true for Cal-Maine Foods (NASDAQ: CALM), a key player in the Consumer Defensive sector, specifically in the Farm Products industry. With a market valuation of $58.11 billion, Cal-Maine Foods has shown a promising performance in May, with a typical day price of $58.23, just shy of its 52-week high of $64.76. Despite a slight negative beta of -0.06, indicating a lower correlation with the market, the company's strong EPS estimate for the current year at $4.67 and for the next year at $2.29, suggests a potential for growth. This is further supported by the Wall Street target price of $62.5, indicating a positive outlook from analysts. However, it's worth noting that there's a possible downside price of $56.1, which investors should consider. The company's payout ratio stands at 0.37, indicating a good balance between reinvesting in the company and rewarding shareholders. However, with a short ratio of 4.25 and shares short prior month at 2.9 million, there's a degree of skepticism in the market. In conclusion, Cal-Maine Foods presents a mixed bag of opportunities and challenges. As we delve deeper into its performance, we'll uncover whether the potential rewards outweigh the risks. Currently, Cal Maine Foods' P/E ratio is stable compared to the previous year. As of April 26, 2024, the EV to Free Cash Flow is projected to increase to 27.97, while the Enterprise Value is expected to decrease by about $925.1 million. This viewpoint is based on forecasting Cal Maine's future value using technical analysis. So, what can Cal Maine investors anticipate in May?
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Reviewed by Raphi Shpitalnik
The asset utilization indicator measures the revenue generated for every dollar of assets a company possesses. Cal Maine Foods has an asset utilization ratio of 160.97 percent, indicating that the company generates $1.61 for each dollar of assets. This increasing ratio suggests that Cal Maine Foods is becoming more efficient in utilizing its assets for daily operations.
In forecasting Cal Maine's stock price, we disregard the company's fundamentals and focus solely on past price trends. We employ techniques such as the exponential moving average (EMA), oscillators, momentum and volume indicators, among others. These technical analysis methods are typically more useful for short-term strategies than long-term ones. The primary assumption in our analysis is that all significant information about Cal Maine Foods is already reflected in the stock price.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Cal Maine. Your research has to be compared to or analyzed against Cal Maine's peers to derive any actionable benefits. When done correctly, Cal Maine's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Cal Maine Foods.
Main Takeaways
With a promising Jensen Alpha of 0.0979 and a favorable PEG Ratio of 0.75, Cal-Maine Foods (NASDAQ: CALM) presents a potentially lucrative investment opportunity. However, investors should be cautious of the company's noncontrolling interest in consolidated entity, which resulted in a loss of 1.5M, and the high downside deviation of 1.4.There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Cal Maine Foods. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Cal Maine
Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of Cal Maine's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
How important is Cal Maine's Liquidity
Cal Maine financial leverage refers to using borrowed capital as a funding source to finance Cal Maine Foods ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cal Maine financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cal Maine's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cal Maine's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Cal Maine's total debt and its cash.
Cal Maine Gross Profit
Cal Maine Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Cal Maine previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Cal Maine Gross Profit growth over the last 10 years. Please check Cal Maine's gross profit and other fundamental indicators for more details.
An Additional Perspective On Cal Maine Foods
Cal Maine Foods has relatively low volatility with skewness of 0.11 and kurtosis of -0.04. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Cal Maine's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Cal Maine's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different financial instruments as prices fall.
"Never count your chickens before they hatch" is a fitting proverb when considering the performance of Cal-Maine Foods (NASDAQ: CALM) in May. Despite a daily typical price of $58.23, slightly below the 50-day moving average of $59.20, the company's robust financial health, as evidenced by a current ratio of 3.38X and zero debt to equity, suggests potential for growth. The farm products industry player, with a market capitalization of $2.93B, has a PEG ratio of 0.75, indicating that the stock may be undervalued given its earnings growth. The company's strong cash flow from operations, at $863.01M, further underscores its financial stability. However, with a probability of bankruptcy at 50.94%, investors should tread carefully, keeping in mind that potential upside of 2.6. .
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