Ex15:26

Cal-Maine Foods: Eggs in One Basket

I'm in the camp of the other posters. I think this is a great intro to a company we've seen and heard a bunch about, mainly the short interest.
Clearly, there are 3 things that must receive more attention and deeper analysis to even begin looking into this -
1) Pricing action - is the whole world short this thing, why, and what catalyst will cause that short interest to go away.
2) Feed costs - you mention it, but what details regarding their feed costs and their ability to either hedge this or inability to plan for this can make for good or lousey future performance.
3) Finally, since they are the #1 producer of eggs how do they drive pricing with their purchasers. Do they have pricing power? What have been egg prices and where do we see them going.

Like I said, good intro, I just wouldn't put a dime into it without knowing this info. Also, I've seen a lot of really smart investors use the dividend as a reason to buy and sit in a loser with the justification that hey "I'm getting a dividend". At the end of the day, all you get is a loser with a dividend - ask BAC investors.
By the way, the yield gets better as you continue to get crushed!

Thanks for the info, I appreciate it and will put it on my list of homework assignments.