In the world of investing, the early bird often catches the worm. Cal-Maine Foods, a key player in the Consumer Defensive sector, has been catching the eye of savvy investors on the NASDAQ. With an Analyst Overall Consensus rating of "Buy" and a range of target prices from $45.05 to $54.95, the stock presents a compelling case for those looking to diversify their portfolios. Despite a recent loss, the stock's Day Median Price of $74.74 and a Possible Upside Price of $77.11 suggest there could be significant room for growth. As we approach the fiscal year end in May, understanding the stock's volatility and potential can help you decide if Cal-Maine Foods is the hidden gem your portfolio needs. Cal-Maine Foods is currently yielding an expected daily return of 0.3215%, with a risk level (volatility) of 1.3531% over the next 90 days. While some traders may overlook this volatility, it's important to consider the risks involved in investing in Cal-Maine Foods. We'll assess whether this volatility is likely to persist into November.
Cal-Maine Foods stock exhibits a relatively high kurtosis of 4.89, indicating potential for significant price swings. With a maximum drawdown of 9.27, investors should be prepared for periods of volatility, but the stock's unique position in the farm products industry could offer rewarding opportunities for those with a higher risk tolerance.
Main Takeaways
Cal-Maine Foods has about $281.8 million in cash and generates $454.4 million in positive cash flow from its operations. This gives the company a cash-per-share (CPS) ratio of 2.88.Cal Maine
financial leverage refers to using borrowed capital as a funding source to finance Cal Maine Foods ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cal Maine financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cal Maine's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cal Maine's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Cal Maine's total debt and its cash.
At this time, Cal Maine's
Begin Period Cash Flow is very stable compared to the past year. . To perform a cash flow analysis of Cal Maine, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Cal Maine is receiving and how much cash it distributes out in a given period. The Cal Maine cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
The recent roll up in Cal Maine short term price appreciation could raise concerns from investors as the firm is trading at a share price of
74.84 on very low momentum in volume. The company executives have successfully maneuvered the firm at convenient times to take advantage of all market conditions in
September. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.35. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
In the world of investing, patience is often the key to unlocking hidden potential. Cal-Maine Foods, trading on NASDAQ, may just be the hidden gem your portfolio needs. With a current ratio of 3.38X, the company shows a strong ability to cover its short-term liabilities, reflecting financial stability. Despite a modest five-year return of 2.87%, its beta of -0.11 suggests that the stock is less volatile compared to the market, offering a safer bet in turbulent times. Additionally, the impressive operating cash flow of $454.4 million indicates robust operational efficiency, making Cal-Maine Foods a compelling candidate for investors seeking steady growth and stability..
Cal may start a collapse in November
Cal-Maine Foods might be heading for some rough times, as indicated by its recent value at risk of -1.81. This figure suggests that the company could face significant financial challenges, potentially leading to a downturn. Investors should be wary, as this negative sign might point to difficulties for the stock, possibly starting in November.
Cal-Maine Foods exhibits relatively low volatility, with a skewness of 1.17 and kurtosis of 4.89. Understanding these volatility trends can help investors make better market timing decisions. Using volatility indicators effectively allows traders to assess the risk of Cal-Maine's stock against market fluctuations during both up and down markets. Increased volatility in bear markets can directly impact Cal-Maine's stock price, causing stress for investors and often leading them to rebalance their portfolios by purchasing different financial instruments as prices drop.
Our Bottom Line On Cal Maine Foods
Although other entities within the farm products industry are still a little expensive, even after the recent corrections, Cal Maine may offer a potential longer-term growth to investors. On the whole, as of the 1st of October 2024, we believe that at this point, Cal Maine is
overvalued with
very low odds of distress within the next 2 years. However, our primary buy-or-sell advice on the firm is
Strong Buy.
Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Cal Maine Foods. Please refer to our
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