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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: FIFO_kid2 who wrote (57203)	4/28/2016 11:43:31 AM
From: grahamanddoddville	Read Replies (1) \| Respond to of 78774

@ FIFO_kid2: Thanks for pointing out the collapsing wholesale price of eggs - obviously this is important to CALM's business (!) One thing I don't yet understand is whether their large buildup in retained earnings can compensate for the highly cyclical nature of the business over the coming two quarters? Frankly, I agree with your thesis about an earnings drop. That being said, I also like that corn prices are down, which is a major expense for CALM. I find it worth reiterating that short interest is now very high, and that not everyone can win on that trade - in fact, if there is a minor earnings surprise, or for whatever reason if egg prices don't remain down, CALM could pop on a squeeze. It looks like a reasonably run company, so worst case, I follow the cycle through its end, and have a margin of safety in good management and a well-run business ... I opened a small position today; we'll see how it plays out. Best of luck! At least one of us will likely make money here :) Happy trading, GDV