How does CAL-MAINE FOODS INC (NASDAQ:CALM) stack up against Mark Minervini’s strategy?

In this article we will dive into CAL-MAINE FOODS INC (NASDAQ:CALM) as a possible candidate for growth investing. Investors should always do their own research, but we noticed CAL-MAINE FOODS INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

CALM passes the Minervini Trend Template check!

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for CALM:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Understanding CALM's High Growth Momentum Score

ChartMill assigns a proprietary High Growth Momentum Rating (HGM) to each stock. The score is computed by evaluating various growth and profitability aspects aspects, like EPS and revenue growth, accelleration, surprises and revisions. CALM was assigned a score of 7 for growth:

Earnings Momentum

• The EPS of CALM has exhibited growth from one quarter to another (Q2Q), with a 338.0% increase. This underscores the company's ability to generate higher earnings and improve its financial standing.
• The 1-year EPS growth of CALM (304.0%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• Over the past 3 years, CALM has demonstrated 402.0% growth in EPS, signifying its positive financial trajectory and potential for future profitability.
• CALM has demonstrated strong quarter-to-quarter (Q2Q) revenue growth of 102.0%, reflecting its ability to generate consistent increases in sales. This growth highlights the company's effective market positioning and its potential for continued success.
• CALM shows accelerating Sales growth: when comparing the current Q2Q growth of 102.0% to the previous quarter Q2Q growth of 82.46%, we see the growth rate improving.
• Sales growth accelerated for 3 quarters in a row.
• With notable 1-year revenue growth of 60.01%, CALM exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for future growth.
• The average next Quarter EPS Estimate for CALM has experienced a 503.0% change in the last 3 months, reflecting evolving expectations by analysts regarding the company's EPS performance.
• CALM has surpassed EPS estimates 3 times in the last 4 quarters, reflecting its strong financial performance and effective management. This trend suggests the company's ability to generate positive earnings surprises and drive shareholder value.

Financial Strength & Profitability

• With a favorable trend in its operating margin over the past year, CALM demonstrates its ability to enhance profitability through efficient operations. This growth reflects the company's focus on optimizing its cost structure.
• With positive growth in its free cash flow (FCF) over the past year, CALM showcases its ability to generate strong cash flows and maintain a solid financial position. This growth reflects the company's efficient utilization of capital and its commitment to long-term value creation.
• The Return on Equity(ROE) of CALM is 41.6%, which is a strong number. This indicates the company's ability to generate favorable returns for shareholders and reflects its effective management of resources.
• A Debt/Equity ratio of 0.0 suggests that CALM is managing its debt levels responsibly.

Institutional Confidence & Market Strength

• With institutional shareholders at 91.92%, CALM demonstrates a healthy ownership distribution. This reflects a mix of institutional and individual investors, creating a market environment that may foster increased trading activity and price discovery.
• CALM has maintained a healthy Relative Strength (RS) over the analyzed period, with a current 95.06 rating. This demonstrates the stock's ability to outperform its peers and indicates its competitive positioning.

How do we evaluate the setup for CALM?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for CALM is 4:

Although CALM has an excellent technical rating, the quality of the presented setup is not ideal at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Check the latest full technical report of CALM for a complete technical analysis.

Concluding

It looks like CAL-MAINE FOODS INC meets the Minervini criteria. More high growth momentum breakout stocks can be found in our High Growth Momentum + Trend Template screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.