One of my favorite smaller positions is the leading public egg producer Cal Maine Foods (CALM) – which reported earnings after the close Tuesday. The stock has been going sideways for at least six months now but the fundamentals continue to be off the charts.
I don’t pretend to be an expert in the egg market but we all know from our grocery bills that egg prices have gone up a lot – and that’s reflected in CALM’s results. Their Net Average Selling Price Per Dozen for the quarter ended February 25, 2023 more than doubled to $3.298 from $1.612 a year ago.
Most of that price increase went straight to the bottom line with CALM earning an astounding $6.62/share last quarter. CALM shares closed Tuesday at $54.27. In other words, CALM earned 1/8th of its market cap in just the last three months! I don’t think I’ve ever seen that before.
Clearly investors view the current egg market as an anomaly – and one not likely to last. There is a sizable short interest in CALM as well. But I always like a couple eggs with breakfast to get my day going – and they might be healthy for your portfolio as well.