User 80605

Cal-Maine Foods: Eggs in One Basket

Also, Technically, teh chart does not look good. If it hits 29, then it could go to $27.5 soon and potentially $25-$26 area.

Cal-Maine Foods: Eggs in One Basket

I see a few positive things. Think of cal-maine as poor man's steak. As more money is taken out of people's budgets to pay for higher gas prices, people will most likely substitue eggs for meat. This is normal behavior. Also, I have read some where that the reason management has taken 30% payout of earnings as dividends is to scare short sellers that have been keeping the share price suppressed. Like someone said, you really need a catalyst for short sqeeze.


Now the negative: The variable payout strategy has not been working so far as it seems more folks believe higher feed prices will eventually hit cal-maine's margins and its stock.

Disclosure: I am long CALM with average price of 33.24 (including covered call proceeds)