Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor provides marketing and data services to Validea.ca and receives compensation. Try it.
Egg producer Cal-Maine Foods sells its eggs in the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States. It has a $3-billion (U.S.) market cap.
Cal-Maine has taken in about $1.8-billion in sales over the past 12 months and has a 12 month relative strength of 92.
It has grown EPS at a 22-per-cent pace over the long term (using an average of the 3-, 4- and 5-year EPS growth rates), which the Peter Lynch based model likes. It has 0.5 P/E-to-growth ratio, which the Lynch model also likes.
The company trades for just 11.1 times trailing 12-month EPS. It gets some interest from the Martin Zweig-based model, which likes that its strong long-term earnings growth accelerated last quarter to 418 per cent. The Zweig model also likes its 5-per-cent debt/equity ratio.
Cal-Maine gets strong interest from Joel Greenblatt-based model, thanks in part to its strong 48.7-per-cent return on capital (using EBIT/tangible capital employed). It has 14.6-per-cent earnings yield (using EBIT/enterprise value), another reason the Greenblatt model is interested.
Cal-Maine has a stellar 39-per-cent return on equity, and its dividend is 3.3 per cent.
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