If you are a long term investor it might be wise to proceed apace with management continuing to be conservative in this business. Cash is king in this business. Cash is king in an economy with increasing interest rates. Cash is king is why CALM has outperformed 95% of all stocks over the past 10 years, not including dividend. This is agriculture. Agriculture is not as predictable as are most industries. It is much more dependent on weather (corn, soy, etc prices). In my view: No buyback. Keep the generous dividend policy and keep the rest of the cash.
Cannot dispute the fact that CALM stock has risen from $1.21 per share to current price since listing 19 years ago this month. Add dividends to that and you have one of the best stocks you could possibly own.
It is the fiduciary duty of the management to do what is in the best interest of shareholders, including share price appreciation. When a company beats the likes of Facebook and Disney, that company is doing its very best to meet its fiduciary duty.
Thank you very much for both dividend and stock price appreciation, both of which is superior to virtually all other companies on the stock market today. Furthermore your cash preservation provides the necessary cushion to enable maneuvering through any downturns.
Egg King's Boost From Restaurant Champ
The largest U.S. producer and distributor of fresh shelled eggs, Cal-Maine Foods is also a major supplier of cage-free eggs.
In September, McDonald's (NYSE:MCD), the world's largest restaurant chain, said that it will phase out the use of eggs from hens that are caged. It's also begun selling breakfast items, including the popular Egg McMuffin sandwich, all day long.
These moves add up to a more robust market for Cal-Maine.
Last quarter, Cal-Maine's EPS soared 418% vs. the same quarter a year ago to $2.95 per share.