Feather your nest with smart investments. As we look ahead to February, Cal-Maine Foods, a key player in the Consumer Defensive sector, is drawing attention. With a robust total stockholder equity of $1.8 billion and a net income from continuing operations of $276.3 million, the company showcases a solid financial foundation. Despite facing some challenges, such as a loss in certain quarters, Cal-Maine's strategic positioning in the Farm Products industry could offer growth potential. Their forward dividend rate of $2.91 further sweetens the deal for income-focused investors. As we delve deeper, the question remains: will Cal-Maine's stock hatch new opportunities for growth? Cal-Maine Foods is set to release its earnings today. Currently, the company's price-to-cash-flow ratio is more stable than it was last year. By January 1, 2025, their capital expenditures to operating cash flow ratio is expected to rise to 0.48, while the enterprise value might decrease by approximately $925.1 million. With growing interest in the food products sector, Cal-Maine Foods presents an intriguing investment opportunity worth considering.
Cal Maine financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Cal Maine, including all of Cal Maine's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Cal Maine assets, the company is considered highly leveraged. Understanding the
composition and structure of overall Cal Maine debt and outstanding corporate bonds gives a good idea of
how risky the capital structure of a business is and if it is worth investing in it. Please read more on our
technical analysis page.
Understanding Cal Total Liabilities
Cal Maine Foods liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Cal Maine Foods has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Cal Maine balance sheet include debt obligations and money owed to different Cal Maine vendors, workers, and loan providers. Below is the chart of Cal short long-term liabilities accounts currently reported on its balance sheet.
You can use Cal Maine Foods
financial leverage analysis tool to get a better grip on understanding its financial position
How important is Cal Maine's Liquidity
Cal Maine
financial leverage refers to using borrowed capital as a funding source to finance Cal Maine Foods ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cal Maine financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cal Maine's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cal Maine's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Cal Maine's total debt and its cash.
An Additional Perspective On Cal Maine Foods
The recent price roll up of Cal Maine Foods could raise concerns from investors as the firm is trading at a share price of
102.03 on very low momentum in volume. The company executives may have good odds in positioning the firm resources to exploit market volatility in
February. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.81. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
Liabilities Breakdown
239.1 M
Total Current Liabilities
123.6 M
Non Current Liabilities Total
| Total Current Liabilities | 239.13 Million |
| Liabilities And Stockholders Equity | 2.29 Billion |
| Non Current Liabilities Total | 123.57 Million |
| Non Current Liabilities Other | 9.07 Million |
In the realm of finance, cash is king, and Cal-Maine Foods seems to be sitting comfortably on its throne. With a robust current ratio of 3.38X, the company demonstrates a strong ability to cover its short-term liabilities, suggesting financial stability. Despite the challenges in the farm products industry, Cal-Maine's debt-to-equity ratio stands at an impressive 0%, indicating that the company is not reliant on borrowed funds for growth. As February unfolds, investors might find Cal-Maine's solid financial footing and strategic positioning in the domestic food products sector a compelling reason to consider this stock for potential growth..
Will Cal pull back in February 2025?
Cal-Maine Foods has been experiencing significant price swings, with recent volatility metrics showing semi-deviation upswings over 1.24. This level of fluctuation might hint at a potential price correction by February 2025, as such volatility often leads to a pullback. Investors should monitor market conditions and company performance closely to assess whether the stock will stabilize or continue its erratic path. As of January 1st, Cal-Maine's downside deviation stands at 1.83, with a mean deviation of 1.43 and a risk-adjusted performance of 0.2328. Analyzing historical prices and volume patterns can help predict future price directions. It's important to review Cal-Maine's information ratio and the relationship between value at risk and expected shortfall to determine if the current price of $102.03 per share is justified. With a Jensen Alpha of 0.5288, it's advisable to evaluate Cal-Maine's market performance to ensure its long-term viability.
The Bottom Line
Although many other companies within the farm products industry are still a little expensive, even after the recent corrections, Cal Maine may offer a potential longer-term growth to investors. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither trade nor short any shares of Cal Maine at this time. The Cal Maine Foods risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Cal Maine.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Cal Maine Foods. Please refer to our
Terms of Use for any information regarding our disclosure principles.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
[email protected]