CAL-MAINE FOODS INC (NASDAQ:CALM) Excels on Key Navellier Growth Metrics

In the world of growth investing, few strategies have kept their importance as well as the system detailed in Louis Navellier’s "The Little Book That Makes You Rich." Published in 2007, the book breaks down growth investing into eight specific rules made to find companies with outstanding financial momentum and operational quality. These criteria, which include earnings revisions and surprises, sales growth, margin expansion, cash flow, and return on equity, work to find businesses not only growing, but speeding up. Investors using this method look for firms that regularly beat expectations, show getting-better fundamentals, and prove an ability to turn growth into shareholder value.

CAL-MAINE FOODS INC (NASDAQ:CALM) appears as a strong candidate when measured against Navellier’s principles. The company, a top producer and distributor of shell eggs, has shown notable alignment with these growth-focused filters, making it a significant example of how traditional industries can show powerful financial performance under the right conditions.

• Positive Earnings Revisions: A key part of Navellier’s method, upward revisions in earnings estimates frequently point to underlying operational strength or improving industry conditions. CALM’s next-quarter EPS estimates were revised upward by over 313% in the last three months, showing major analyst confidence in its near-term outlook.

• Positive Earnings Surprises: Regular outperformance compared to expectations can push both upward estimate revisions and market sentiment. CALM has beaten EPS estimates in three of the last four quarters, with an average surprise of nearly 15%, showing a habit of exceeding projections.

• Increasing Sales Growth: Top-line expansion is vital for growth investors, and CALM’s revenue growth is very noticeable. Year-over-year revenue grew by 83.2%, while quarterly sales jumped 72.2%, proving strong demand and execution.

• Expanding Operating Margins: Profitability improvement is a main sign of operational efficiency. CALM’s operating margin expanded by an exceptional 171.8% over the past year, emphasizing its ability to turn higher sales into much greater profits.

• Strong Cash Flow: Good cash generation supports reinvestment, debt reduction, and shareholder returns. CALM’s free cash flow grew by 249.5% year-over-year, highlighting financial soundness and flexibility.

• Earnings Growth: Bottom-line growth stays essential. The company’s trailing twelve-month EPS grew by 393.1%, while its most recent quarter saw EPS rise 203.4%, reflecting forceful earnings momentum.

• Positive Earnings Momentum: Acceleration in earnings growth often comes before continued outperformance. CALM’s current quarterly EPS growth greatly exceeds its growth rate from the same quarter one year ago, meeting Navellier’s momentum requirement.

• High Return on Equity: Effective capital allocation is measured by ROE, and CALM’s 47.6% return puts it with the top performers in its industry, showing efficient use of equity capital.

Beyond these specific criteria, a look at CALM’s wider fundamental profile supports its strength. The company has an impressive fundamental rating of 8 out of 10, reflecting high quality in profitability, financial health, and valuation. It operates with no debt, excellent liquidity ratios, and industry-leading margins. While future growth expectations are moderated, as analysts project a drop in earnings, the company’s recent performance and financial position indicate resilience. For a detailed breakdown, readers can see the full fundamental analysis report.

It is important to note that while CALM matches strongly with Navellier’s growth filters, the strategy stresses the importance of context, as different market environments may favor different factors within the system. Also, screens like these are beginning points for more research rather than direct buy recommendations.

For investors interested in finding other companies that meet these strict growth criteria, more results can be found using the Louis Navellier Little Book screener.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.