Cal-Maine Foods, Inc. (NASDAQ:CALM)

CAPS Rating: 4 out of 5

The Company is in the business of producing, grading, packaging, marketing and distribution of shell eggs.

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Player Avatar drewvogel (57.79) Submitted: 2/7/2013 8:26:55 PM : Outperform Start Price: $45.06 CALM Score: +11.66

The 2012 drought upset the corn markets. Since corn is a major input cost for CALM and we lack commensurate supply/demand mismatch for wholesale eggs CALM profitability will suffer until at least Q3 2013 (calendar). The stock price will likely suffer with it, providing healthy buying opportunities. Meanwhile CALM can continue to use it's strong balance sheet to pursue it's acquisition strategy. When feed costs revert to their normal cycle and/or wholesale egg prices rise due to consolidation, CALM will reap an increasing proportion of the upside.

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