CAL-MAINE FOODS INC (NASDAQ:CALM) – A High-Growth Momentum Stock with Strong Technical Setup

CAL-MAINE FOODS INC (NASDAQ:CALM) stands out as a high-growth momentum candidate with a solid technical breakout setup. The company, a leading producer and distributor of shell eggs, has demonstrated exceptional earnings and revenue growth while maintaining strong profitability. Its stock also shows favorable technical conditions, making it a potential candidate for momentum investors.

Why CALM Fits High-Growth Momentum Criteria

• Exceptional Earnings Growth: CALM reported a trailing twelve-month (TTM) EPS growth of 303.8%, with recent quarterly EPS growth exceeding 337.9%. The next quarter’s estimated EPS growth is projected at 127.4%.
• Strong Revenue Expansion: Sales growth for the latest quarter came in at 101.6%, with TTM revenue growth at 60.0%.
• Expanding Profit Margins: The company’s latest quarterly profit margin reached 35.9%, up from 17.7% three quarters ago, indicating improving efficiency.
• Positive Analyst Revisions: EPS estimates for the next year have been revised upward by 46.5% over the past three months, reflecting growing optimism.
• Consistent Earnings Surprises: CALM has beaten EPS estimates in three of the last four quarters, with an average surprise of 16.0%.

Technical Strength and Setup Quality

CALM’s technical profile is equally compelling, with a Technical Rating of 9/10 and a Setup Rating of 8/10. Key observations from the technical report include:

• Strong Uptrend: Both short-term and long-term trends are positive, with the stock outperforming 92% of the market.
• Consolidation Near Resistance: The stock has been trading in a range between $91.72 and $100.54, with resistance near $98.99-$99.64. A breakout above this zone could signal further upside.
• Support Levels: Multiple support zones exist below, including a key area at $94.42-$96.36, providing a clear stop-loss level for traders.
• Pocket Pivot Signal: Recent price action has shown a bullish accumulation pattern, reinforcing the positive momentum.

Trade Setup Suggestion

The technical report suggests a potential entry above $99.65, with a stop-loss below $94.41, representing a 5.3% risk. Given the strong fundamentals and technical setup, CALM presents an interesting opportunity for momentum-focused investors.

For more high-growth momentum stocks with strong technical setups, check our High Growth Momentum Breakout Setups Screen.

Disclaimer

This is not investment advice. The article highlights observations at the time of writing, but investors should conduct their own analysis before making decisions.