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Strategies & Market Trends : Value Investing
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From: Paul Senior4/28/2016 10:00:05 AM
1 Recommendation

Recommended By
E_K_S

  Read Replies (2) of 78802
 
CALM. I made a small buy after EKS mentioned here that he was watching it. Cyclical company, and if I recall correctly, what sank the stock last time was the high cost of feed (corn). Corn prices are down now, so now that factor doesn't appear to me to be a problem. As pointed out, company has cash (more cash than debt), and also has very good growth (in revenue) history. Yahoo analyst expections are for rise in p/e (i.e. earnings decline) to where the p/e would be 14x at current price next year. That's relatively high, but stock has traded there before. P/sales, p/book are relatively high now. I like the size of the company (large competitor). If I look out 10-20 years, I see people still eating eggs - (maybe CALM won't be around though). I'm ok with company sharing earnings through dividends when business is good; cutting back/quashing dividends when earnings decline/disappear -- that seems reasonable to me for a business that I see as cyclical.

Perhaps it is best to wait for further lows in the cycle or business. For me, the stock's come back down to where I'll reenter it with a small buy, and my intent is to average down if/as stock drops further.
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