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Cal-Maine Foods Completed Its Acquisition of Foodonics International


Nov. 7 2016, Updated 6:04 p.m. ET

Price movement

Cal-Maine Foods (CALM) fell 4.4% to close at $36.50 per share during the first week of November 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.4%, -5.3%, and -19.3%, respectively, as of November 4.

CALM is trading 3.9% below its 20-day moving average, 10.2% below its 50-day moving average, and 19.7% below its 200-day moving average.

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Related ETF and peers

The Vanguard Small-Cap ETF (VB) invests 0.04% of its holdings in Cal-Maine Foods. The ETF tracks the CRSP US Small Cap Index. The market cap–weighted index includes the bottom 2%–15% of the investable universe. The YTD price movement of VB was 4.6% on November 4.

The market caps of Cal-Maine Foods’ competitors are as follows:

  • Pilgrim’s Pride (PPC) — $4.9 billion
  • Industrias Bachoco (IBA) — $2.5 billion

Latest news on Cal-Maine Foods

In a press release on November 2, 2016, Cal-Maine Foods reported, “Cal-Maine Foods, Inc. [CALM] today announced that it has closed the previously announced acquisition of substantially all of the assets of Foodonics International, Inc. and its related entities doing business as Dixie Egg Company, relating to their commercial production, processing, distribution and sale of shell eggs business.”

It added, “The acquired assets include commercial egg production and processing facilities with capacity for approximately 1.6 million laying hens and related feed production, milling, and distribution facilities in Georgia, Alabama and Florida, as well as contract grower arrangements for an additional 1.5 million laying hens. With the completion of this transaction, Cal-Maine Foods has also acquired the Egg-Land’s Best, Inc. franchise with licensing rights for portions of certain markets in Alabama, Florida, and Georgia as well as Puerto Rico, Bahamas, and Cuba.”

Performance of Cal-Maine Foods in fiscal 1Q17

Cal-Maine Foods reported fiscal 1Q17 net sales of $239.8 million, a fall of 60.7% compared to its net sales of $609.9 million in fiscal 1Q16. The price of a dozen eggs sold and produced fell 6.4% and 1.9%, respectively, in fiscal 1Q17, compared to the prior year’s period.

Its net income and EPS (earnings per share) fell to -$30.9 million and -$0.64, respectively, in fiscal 1Q17, compared to $143.0 million and $2.95, respectively, in fiscal 1Q16.

CALM’s cash and short-term investments and inventories fell 21.2% and 0.13%, respectively, in fiscal 1Q17 compared to 4Q16. Its current ratio rose to 7.6x in fiscal 1Q17, compared to 7.5x in fiscal 4Q16. It reported a debt-to-equity ratio of 0.21x in both fiscals 1Q17 and 4Q16.

Next, we’ll discuss Ball Corporation (BLL).


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