CALM - Cal-Maine Foods Inc

[dn4911]

I started a small position in this stock 1/24/2008. In one week it has gone up 23%. In trying to figure out if I should sell or buy more I found the following information I thought I would share. Friday's volume very high and it was up 8% may be a short squeeze here, but also high risk.

Fundamentals seem solid, this is the company that brings you egglands' best eggs, largest egg supplier in the country, sales increased 25% last year, 15% of sales are specialty eggs.

Shares Short / 8,642,800
Days to Cover (short Ratio)/ 12.5
Short % of Float 60.78 %
Short % increase/decrease 27.00 %
Shares Short - prior Month 6,805,500

Short Interest Stock Short Selling Data, Shorts, Stocks: Short Squeeze

Average DAILY VOL. 692,000

Fridays vol. 1,396,208

From HotStockMarket, posted today:

Cal-Maine Foods Inc (NASDAQ: CALM)

Worth adding to the watch list, Cal-Maine Foods is flirting with the 52 week high again, the short sellers are caught in a small trap here.

They were successful when the stock touched resistance and failed dropping below the 50 DMA, this with market conditions at that time had them increase there short positions by almost 2 mil more.

This was not a good move, now the covering has started some started to cover as it crossed the 50dma and now breaking resistance has triggered short covering.

if it makes a new high they have to continue the covering, margin calls and severe losses may occur.

Who's watching? The traders and fund managers . They carefully watch these levels and follow short interest levels.

Indicators are high? You bet, but the time to cover these shorts if triggered trumps traditional thinking.

Fridays volume was 'buying" even if it was in the form of covering it triggered attention.

In a unstable market with pressure to the downside, these short term trades can be profitable, and risky at the same time.

Great care must be taken to avoid a fake out situation. (stops) Know your downside risk before you enter any high risk trade without further confirmation.

Take a closer look at the company:

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs. The Company, which is headquartered in Jackson, Mississippi, currently is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 28 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.

Fiscal 2007 was a very good year for Cal-Maine Foods.
For the year, we reported net sales of $598.1 million, an increase of 25 percent
compared with net sales of $477.6 million for fiscal 2006. Net income was
$36.7 million, or $1.66 per share, for fiscal 2007 compared with a net loss of
$1.0 million, or $0.04 per share, in fiscal 2006.

Fiscal 2007 was a transition year for the Company after many years of low cost
feed for our chickens. Market prices for corn and soybean meal, our primary
feed ingredients, increased substantially over the year, resulting in much higher
feed costs for the Company compared with prior years. Strong demand for corn
by ethanol plants caused corn prices to increase by 50 to 60 percent during the
year. Projections show these higher feed prices are likely to continue for the next
few years.

The total egg industry was affected by the dramatic rise in feed costs. However,
the industry reacted to the situation by reducing egg production slightly, which
allowed the increased costs to be passed through in higher egg prices. Although
egg prices are higher compared with a year ago, they still represent a good value
for the consumer compared with other proteins and with other food in general.

As we move into our new year, we are optimistic about our prospects. All of our
operations are running smoothly. Our management team is doing a good job,
and the economics of our business remain favorable. We appreciate the
continued support of our customers, shareholders, and employees.

Sincerely,
Fred Adams, Jr.
Chief Executive Officer

video: http://www.netnewsusa.com/CalMaine2000-1.asx

company web site: Cal-Maine Foods, Inc

__________________


From Egg Industry surveys:

Producers are less optimistic on shell egg prices than they were a year ago. Nearly half, 47.2 percent, look for shell egg prices to decrease in 2008, yet about 30 percent still look for prices to increase, according to Egg Industry’s annual survey conducted last month.

Producers are more optimistic on prices for liquid eggs, further processed products, and specialty egg products, however. More than a third, 36.7 percent, look for liquid egg prices to increase, 26.7 percent anticipate a decrease in prices, while 36.7 percent expect prices to stay the same.

On further processed products, 44.4 percent look for prices to stay the same, 33.3 percent say prices will increase, while 22.2 percent anticipate a price decrease.

When it comes to organic eggs, 60.2 percent expect a price increase in 2008, less than 10 percent look for a price decrease, while 30.3 percent say prices will stay the same. And on cage-free eggs, 54.5 percent look for a price increase, 9.1 percent expect a price decrease, and 36.4 percent say prices will stay the same.

More than half of those surveyed say layer numbers will increase in 2008, only 3 percent say numbers will decrease, with 45.5 percent saying layer numbers will stay the same. Twenty-five percent say they expanded production through new construction over the past 12 months, while 75 percent say they did not. And 11.1 percent acquired other operations in 2007, while 88.9 percent did not.

[dn4911]

February 22, 2008
By Paul Mickiewicz

Cal-Maine Foods (CALM) is at a record high and is involved in a highly cyclical commodity business. This sounds like a recipe to get burned buying the top. But if you look very carefully, the company is in the middle of a perfect storm, but in a good way. The storm has three components, working in harmony to blow this stock higher still.

1) Record Egg Prices

Since the fall, egg prices have remained at or very near record highs, as you may have observed at your local grocery store. Typically there is a highly seasonal fluctuation in egg prices - higher in fall/winter, lower in spring/summer. Thus, prices should be trending down right after Easter, after demand drops. This boom-and-bust cylce has occurred many times in CALM's history. But things really are different this time.

Historically, the typical response to higher prices (with eggs or any other commodity) is to increase production, which triggers a drop in prices and profits. However, adding production now is not nearly as easy as it may seem. Every available cage already has a bird in it. Permits for new facilities are difficult to obtain and take a long time to procure. Most importantly, there are proposals in several states and federally to mandate increased cage sizes, and so producers are very hesitant to expend capital to purchase new equipment, risking obsolescence if regulations change and decreased profit margins and competitiveness operating larger cages if they don't. Vendors that sell such equipment are moving very little of it. Bottom line: Egg prices are not going to drop substantially any time soon.

2) Record Earnings

Because egg prices have stayed high for so long, CALM will in all likelihood post record earnings for the current quarter, which ends this month. Up until now, CALM payed a paltry dividend, but a change in policy (which takes effect this quarter) will pay out one third of earnings as a dividend. Based on recent trends in egg prices and feed costs, I conservatively estimate this quarter's earnings at about $2 a share, and perhaps $6-7 for the next year, giving it an implied yield of at least 6-7%.

3) Record Short Position

The latest available data show that 67% of CALM's float is short, an 11% increase in just the last few weeks. These folks are betting on a price and profit collapse that is not going to happen anytime soon, for the reasons outlined above. With the stock setting new highs almost every day, every one of those shares is underwater. With the new dividend policy, the pain is potentially even worse, because those shorts pay that dividend out of their own pockets. And to top it all off, Goldman Sachs recently filed a 13d, disclosing that they own 6.5% of outstanding shares. If I were short CALM (and I have been many times in the past), I would be very nervous right about now. Buying a stock at its record high can be risky, but fundamentals and a short squeeze (which I think is happening right now) is highly likely to send this even higher.

Disclosure: Author has a long position in CALM

Note from DN - I sold my CALM at 32, It hit a 52wk high yesterday at 34.60. I am looking to get back in at 29.

[dn4911]

CALM still flying.

Cal-Maine Foods Inc., (CALM) a Jackson, Miss., egg producer, reported fiscal third-quarter net income more than tripled on a 59% boost in sales.

Earnings for the quarter ended March 1 rose to $57.2 million, or $2.41 a share, from $17.4 million, or 74 cents, in the year-earlier period.

Sales advanced to $278 million from $175.2 million.

The results reflect record egg prices, Chairman and Chief Executive Fred Adams said in a statement on Monday.

Demand was strong at retail and in food service.

Short Percent of Float 87.46 %

Still has a ways to go up with all these shorts I think.

[dn4911]

OK I am back on the bandwagon for this stock. EPS of 5.63, PE of 5.4
Another short squeeze in the making IMO.

Shorts at an all time high
Short Interest

stats as of today from Short Squeeze:

CalMaine Foods Inc. $ 29.93
CALM -0.50
Short Interest (Shares Short) 12,436,200
Days To Cover (Short Interest Ratio) 21.2
Short Percent of Float 87.46 %
Short Interest - Prior 11,988,600
Short % Increase / Decrease 3.73 %
Short Squeeze Ranking™ 2,852
% From 52-Wk High ($ 40.75 ) -36.15 %
% From 52-Wk Low ($ 12.06 ) 59.71 %
% From 200-Day MA ($ 27.41 ) 8.42 %
% From 50-Day MA ($ 34.13 ) -14.03 %
Price % Change (52-Week) 153.80 %
Shares Float 14,220,000
Total Shares Outstanding 23,712,291
% Owned by Insiders %
% Owned by Institutions %
Market Cap. 709,708,870
Trading Volume - Today 167,774
Trading Volume - Average 585,800
Trading Volume - Today vs. Average 28.64 %
Earnings Per Share 5.63
PE Ratio 5.40

[dn4911]

Apr 10, 2008 06:30:03 (ET)

JACKSON, Miss., Apr 10, 2008 (BUSINESS WIRE) -- Cal-Maine Foods, Inc. (CALM, Trade ) announced today that it will commence payment of the Company's new variable rate dividend policy for the third quarter of fiscal 2008. Pursuant to this new policy, the amount of the quarterly dividend is computed in accordance with generally accepted accounting principles in an amount equal to one-third (1/3) of the Company's quarterly income. For the third quarter of fiscal 2008, which ended March 1, 2008, Cal-Maine will pay a cash dividend of approximately $.807 per share to holders of its common stock. In addition, a cash dividend of $.767 per share will be paid to holders of its Class A common stock, which represents 95 percent of the amount paid to holders of common stock. This amount could vary slightly based on the amount of outstanding shares on the record date. The dividend is payable May 15, 2008, to shareholders of record on April 30, 2008.

Commenting on the announcement, Fred Adams, Jr., chairman and chief executive officer of Cal-Maine Foods, Inc., said, "Cal-Maine delivered a very solid performance in the third quarter of fiscal 2008, with net income of $57.2 million, or $2.41 per basic share. These results reflect record high egg prices and very favorable market conditions in the egg industry. As we commence our new variable rate dividend policy this quarter, we are pleased that our strong performance has provided this opportunity to reward our shareholders. At the same time, we are well positioned to continue to pursue our growth strategy. We believe this new dividend policy is in the best interest of the Company and its shareholders."

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs. The Company, which is headquartered in Jackson, Mississippi, currently is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in approximately 29 states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.

Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties (contained in the Company's SEC filings) that could cause actual results to differ materially from those projected. SEC filings may be obtained from the SEC or by contacting the Company.

SOURCE: Cal-Maine Foods, Inc.
{Note - This should really hurt the short sellers. dn}