Cal-Maine Foods, Inc. Could Surprise the Street on Monday

Tags: CALM
27 Dec 4:37am
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Next week's earnings releases are slim, but one company worth noting is stepping into the earnings spotlight. Cal-Maine Foods, Inc. (CALM: sentiment, chart, options) is a producer and marketer of shell eggs in the United States. Analysts are expecting the company to report earnings of $1.26 per share. CALM has surpassed analysts' expectations during each of the past 4 quarters.

During the past 60 trading sessions, the stock has outperformed the S&P 500 Index (SPX) by more than 45%, yet the Street has failed to notice. The security has added 38% since mid-November, finding support from its 10-day moving average.

As mentioned, the equity is barely followed on the Street. Zacks reports that no brokerages currently have ratings for the shares. Thomson Financial lists the stock's average 12-month price target at $27, a 9% discount to CALM's closing price on Wednesday.

Furthermore, Cal-Maine's Schaeffer's put/call open interest ratio (SOIR) is docked at 0.99, indicating that calls and puts are almost equal. More importantly, this ratio is ranked higher than 80% of all similar readings taken during the past year, meaning that short-term option players have been more bearishly aligned just 20% of the time during the prior 52 weeks.

If this stock is able to once again top analysts' expectations in the earnings confessional, CALM could see a swelling of bullish bets. Maybe option players are already starting to notice the outperformer; during the past 10 days on the International Securities Exchange (ISE), calls have outnumbered puts by more than 6 to 1.

My takeaway: keep an eye on this stock on Monday. If the stock meets or beats predictions, it could be headed further up the charts.


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Schaeffer’s Investment Research, founded by Bernie Schaeffer in 1981, is a research-driven provider of investment research and recommendations featuring a unique, time-tested analysis of investor expectations. Schaeffer's contrarian approach, called Expectational Analysis®, focuses on stocks with technical and fundamental trends that run counter to investor expectations. The firm publishes Bernie Schaeffer's Option Advisor, the nation's leading options subscription publication and it's website, www.SchaeffersResearch.com, is recognized as one of the leading information sources for stock and options traders and was cited as the top options website by both Forbes and Barron's.