1. Instead of using a specific price, I took the Q4 sales, and multiplied it by the ratio of Q1 estimated prices per USDA, divided by the respective Q4 prices, and backed it down a tad for non-particpating sales. So: $403M x 2.35 / 1.50 = $631M... I backed it down to $610M.
2. Didn't use a percent. Again more of a ratio, but backed out $21M from that figure. I think 'outsourced eggs' will participate in market price increases to an extent as well.
3. Looking at prior years, sales don't decline that much during the summer. From In 2012, comparing Q4 to Q1, the sales declined from $275M to $272M (but the Q4 figure was 14 weeks); In 2013, sales dropped from $325M to $319M, and in 2014, sales dropped from $371M to $356M. So maybe you have a point, but it shouldn't be that material.
JACKSON, Miss., Sep 14, 2015 (BUSINESS WIRE) -- Cal-Maine Foods, Inc. CALM, -0.37% today announced that the Company will release its first quarter fiscal 2016 financial results on Monday, September 28, 2015.
Yes, I know there's a topic for this already on Yahoo, but the thread's getting crowded. The quarter is now over, and in two weeks we'll know the Q1 results. Here's my conservative estimate for the Q1 Cal-Maine income statement (dollars in thousands):
Other Income/(Expense) $2K
Inc Tax $96K
Non controlling interest $2K
Net Income attributable to Cal-Maine shareholders $177K
Diluted shares outstanding 48,495
Assumptions: Units sold assumed to be flat from the prior quarter, sales $ based on 1Q egg prices, relative to the prior quarter--but backed down a bit to account for fixed price contracts with customers, cost of goods sold should be flat to slightly lower, based on lower feed demand, thus lower costs. SG&A should be up from the prior quarter due to bio-security costs, income tax rate assumed to be 35%.
Yahoo finance is at 3.07 as of today 9/12/15. Seems significantly too low.
I have no position in this stock one way or another. However, the stock recently came to my attention, so I did a little research just out of curiosity....and I have to agree. It looks like a fraud. I read the conference call transcript, and they were evasive about their product mix. Furthermore, they announced 15 new distribution facilities.. Good luck trying to find any details of their locations like an address or phone number. They changed auditors last year. Maybe Grant Thornton found something questionable that delayed their audit report. Their website is vague. Yes, the stock looks cheap based on fundamentals, but it looks like the numbers are made up.
Google search the title for the full article from August 16th. Here's the excerpt:
The USDA, which uses New York wholesale egg prices as a benchmark, last week raised its forecast for 2015 and 2016, citing the tight supplies. In the fourth quarter of this year, the USDA sees New York wholesale egg prices averaging $2.38 to $2.52 a dozen, up about a third from its July estimate of $1.79 to $1.91.
...so if this is true, why has CALM stock price stagnated since late July? thoughts?
The latest analyst estimates are CALM will earn 2.54/share for Q1 (ending 8/29/2015). Based on the USDA egg price charts, the average price of eggs for Q4 (5/27/2015) was about $1.50/dz. The runup in egg prices started in mid-May, and this quarter, the average price looks to be about $2.20/dz. So, while sales will go up 45+% this quarter, cost of goods sold should not go up. If anything it should go down because because 13% of US flocks have been destroyed and there's lower demand for feed.
Doing the math: based on the average selling prices, take last Q sales $403,011 x 2.20/1.45 = $611,465. Cost of goods is same as last quarter. Assuming a 35% tax rate, Q1 net income should be above $3.40/share. CALM should be swimming in cash this quarter, some of which can be used to expand operations or buy competitors, increasing EPS for years to come. The stock should not be trading for $52.52/share which was yesterday's closing price. Once the public figures this out, (maybe after the next earnings release) the stock price will go up a lot, certainly well over 60, but probably a lot higher.
Sentiment: Strong Buy