Cal-Maine Foods (CALM): Not as Cheap as You Think – Stock Could Go Lower

Ladies and gentlemen, let me tell you something: Cal-Maine Foods (CALM) is not the bargain you think it is. The market is buzzing about this stock, but let me set the record straight. This isn’t just about a hot stock; it’s about understanding the real story behind the numbers. So, buckle up because we’re diving deep into why CALM might not be the steal you’re hoping for.

First things first, let’s talk about the Consumer Price Index (CPI). The numbers are out, and they’re hotter than a summer day in Texas. The CPI rose 0.4% for the month, setting the year-over-year inflation rate at 3.5%. But here’s the kicker: the price of meat, poultry, fish, and eggs shot up 0.9% month-over-month, with eggs alone climbing 4.6%. Now, you might think, “Wow, that’s inflation!” But hold your horses. This isn’t just about inflation; it’s about a severe outbreak of avian flu. Cal-Maine Foods, the largest egg producer in the country, had to kill 1.6 million chickens and halt production at a plant in Texas. That’s a supply issue, not an inflation problem.



Now, let’s talk about energy. The energy index increased 1.1%, with gasoline up 1.17%. You might think, “Oh no, demand is through the roof!” But no, it’s all about supply. Fighting in the Middle East and the U.S. effort to stop Russian oil from hitting the market are the real culprits here. These increases could be temporary, and the market is acting like it’s the end of the world. But let me tell you, the premise that the CPI accurately reflects reality is suspect. The trend lines suggest that selling in response to this report may have been a mistake.

Now, let’s talk about Cal-Maine Foods specifically. The company reported strong financial and operating performance for the second quarter of fiscal 2025, with net sales of $954.7 million and net income of $219.1 million, or $4.47 per diluted share. But here’s the thing: the market is looking at the long-term growth prospects, while I’m looking at the immediate impact of the avian flu outbreak. This disruption in supply has led to higher prices, which might not be a reflection of inflation but rather a temporary supply issue.



So, what does this all mean for CALM? It means that the stock might not be as cheap as you think. The market is buzzing about this stock, but the reality is that the avian flu outbreak and supply disruptions are clear factors affecting the current price of eggs and, by extension, Cal-Maine Foods' stock. These are temporary issues that could resolve as the outbreak subsides and production resumes. But for now, the market is acting like it’s the end of the world, and that’s a mistake.

So, what do you do? You need to stay away from CALM until the dust settles. The market is acting like it’s the end of the world, but the reality is that the avian flu outbreak and supply disruptions are temporary issues. The market is looking at the long-term growth prospects, while I’m looking at the immediate impact of the avian flu outbreak. This disruption in supply has led to higher prices, which might not be a reflection of inflation but rather a temporary supply issue.

So, there you have it. Cal-Maine Foods (CALM) is not the bargain you think it is. The market is buzzing about this stock, but the reality is that the avian flu outbreak and supply disruptions are clear factors affecting the current price of eggs and, by extension, Cal-Maine Foods' stock. These are temporary issues that could resolve as the outbreak subsides and production resumes. But for now, the market is acting like it’s the end of the world, and that’s a mistake. So, stay away from CALM until the dust settles. The market is acting like it’s the end of the world, but the reality is that the avian flu outbreak and supply disruptions are temporary issues. The market is looking at the long-term growth prospects, while I’m looking at the immediate impact of the avian flu outbreak. This disruption in supply has led to higher prices, which might not be a reflection of inflation but rather a temporary supply issue. So, there you have it. Cal-Maine Foods (CALM) is not the bargain you think it is. The market is buzzing about this stock, but the reality is that the avian flu outbreak and supply disruptions are clear factors affecting the current price of eggs and, by extension, Cal-Maine Foods' stock. These are temporary issues that could resolve as the outbreak subsides and production resumes. But for now, the market is acting like it’s the end of the world, and that’s a mistake. So, stay away from CALM until the dust settles.