U.S. Markets closed

Calavo Growers CEO Invests in Company

- By Jennifer Chiou

Lecil Cole (Insider Trades), chairman and CEO of Calavo Growers Inc. (CVGW), purchased 42,942 shares of the company on April 11. The average price per share was $61.78, for a total transaction of $2,652,957.

Calavo Growers produces and markets a variety of fresh produce items from tomatoes to tropical produce. The company specializes in the manufacture and distribution of guacamole, hummus and salsa. Its wholly-owned subsidiary, Renaissance Food Group LLC, markets and distributes healthy lifestyle products under brands such as Garden Highway and Chef Essentials. Calavo Growers has a market cap of $1.12 billion.

The total number and volume of Calavo insider sells increased each year from 2013 to 2015. The total volume of insider sells increased from 215,000 to 387,636 in that period of time. There was also only one insider purchase of the company amounting to 323 shares from 2013 to 2015. The number and volume of shares sold by insiders decreased to 149,394 in 2016. In 2017 to date, there have been three insider purchases amounting to 139,942 shares. Cole conducted two of the three transactions, which make up about 98% of the total shares purchased by insiders in 2017 to date. For more information about insider trades with Calavo Growers, click here.

For the first fiscal quarter of 2017, the company reported net sales of $226.55 million and cost of sales of $204.63 million. Both net sales and cost of sales are up from $204.58 million in net sales and $183.58 million in cost of sales in the same quarter a year ago.

On the other hand, net income for the quarter decreased from $6.349 million, or 37 cents per share, in first-quarter 2016 to $5.249 million, or 30 cents per share, in first-quarter 2017. Cole said the "fresh avocado operating performance strengthened considerably during the last two months of the initial quarter," however, the company was negatively impacted in the first month of the year by "inconsistent avocado industry supply." Cole said the company is on track to "post double-digit increases in revenues and gross margin dollars, leading to record earnings per share in fiscal 2017."

Calavo's annual revenue and annual net income both follow an increasing trendline, and the company's annual revenue has grown 13.3% since 2012. For more financial statistics, click here.

At the beginning of fiscal 2017, Calavo announced the acquisition of a 128,000 square-foot production facility for its subsidiary, Renaissance Food Group. The facility is slated to begin operations in the second half of fiscal 2017 and is expected to improve sales by 20%.

According to GuruFocus, Calavo Growers has a business predictability rank of 1 out of 5 stars. For more information about business predictability ranks, click here.

Start a free 7-day trial of Premium Membership to GuruFocus.

This article first appeared on GuruFocus.