Jul 26 2008
There’s gold in them thar eggs!
Last month when I was bottomfishing for something good to add to my portfolio, I came across a company that I had never seen before. Cal-Maine Foods (CALM) caught my eye with its eye popping dividend and a P/E of around 6. This Mississippi based egg producer is the largest distributor of fresh eggs in the United States. The company had recently instituted a new dividend policy and pass good returns on to its shareholders. The most recent dividend was over $.80 a share. I was thrilled. The numbers looked great all the way around. I picked it up for around $29/share.
Within a month, the stock had edged up slowly. Suddenly one day Barron’s gave it a nod, and off it took like a wild horse. It still is cheap, and for the patient investor, might prove quite lucrative. It’s up over 29% this month and 88% for the 12 month period. Yet the P/E shows it to be a value stock.
It makes me happy to see that it’s going to add on to the asset base by buying Zephry Egg Company. It’s worth a grab and is the kind of stock you can keep long term. Egg prducers have kept the pric of eggs consistantly high, so the profitability of this company should be good. There’s been no mention of the upcoming dividend, so hopefully when that gets announce, there should be a push upward on the stock.
So if you want a little action in eggs, you might want to check out Cal-Maine. At least you can get back a little from the ever rising price of eggs at the store.
