CALM Plunges Despite Record Numbers

Despite the fact that prices for Cal-Maine Foods’ (NASDAQ:CALM) primary product are climbing to ridiculous highs, the same can’t be said for its stock. Its shares are down substantially in Thursday’s trading. How can a company selling something so expensive be doing so poorly in its stock price?

Cal-Maine’s primary stock in trade is eggs. Anyone who’s tried to grab a dozen at the store lately knows that, somehow, eggs have exploded in price to the point where they look like beef did five years ago. Egg prices are up 197.7% from what they were this time last year. They’re also up 25% against this time last month, which is considered spiking inflation by any standard.

Yet, despite this, Cal-Maine—one of the biggest egg operations around—is plunging. Why? A few very good reasons. The first of these is its recent earnings report for its fiscal second quarter. The company posted record figures, coming in at $4.07 per share in earnings and $801.7 million in revenue. Despite these figures, and despite the fact they were company records, they still proved a disappointment.

Some estimates were looking for as much as $4.26 per share against $797.1 million in revenue. Thus, this is, at best, a mixed report, depending on which estimates you favor. Consensus estimates looked for $4.24 per share, so it’s a disappointment there too. Moreover, some believe that egg prices may have finally hit a peak, which won’t look good for the next quarter’s numbers.

Worse, there’s a significant problem for Cal-Maine investors: its own insiders. Currently, insider trading at Cal-Maine features insiders selling $297,300 worth of shares in the last three months. No insider has made an informative buy of Cal-Maine shares since January 2022. That’s enough to push insider sentiment to Negative.

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