Q1 | Auer Growth Fund (AUERX) Stock of the Quarter: Cal-Maine Foods [CALM]
Q1, 2023 – The managers of the Auer Growth Fund screen thousands of stocks every quarter. This discipline sometimes leads us to an interesting company—with a story or history or performance—that might not be on most investors’ radar. We will be highlighting one of these companies quarterly here. However, we are NOT advocating that the stock is our best-performing stock or that you should purchase it for YOUR portfolio. Because of mutual fund laws and disclosures, we must be careful in discussing any of our holdings, yet we do feel it’s interesting to share information on the company, for this quarter, that we find most intriguing. Please note that, due to our disciplined investment process, this stock may not be currently held in the AUERX portfolio.
That AUERX stock for the 1st quarter of 2023 is Cal-Maine Foods, lnc.—stock symbol CALM (1.86% of the portfolio as of January 18, 2023). Ironically, there is nothing too calm going on at Cal-Maine as the whole world is currently experiencing a virus that is especially harmful to chickens! We don’t know if it’s some form of Chicken Covid, but the virus is creating difficulty for farmers attempting to keep enough egg-laying hens in production to maintain a generous supply of eggs. Cal-Maine, which was founded in 1957 and headquartered in Mississippi, is not a household name with shoppers, but you may know their egg brands, which include Egg-Land’s Best, Land O’Lakes, and Farmhouse Eggs.
As of January 18, 2023, CALM statistics from Yahoo Finance show the last 12 months’ revenue was 2.5 billion, the company had a market value of 2.6 billion, the market close price was $55.34, the trailing 12-month price-to-earnings ratio was 9.87x, and the dividend yield was 5.6%. The book value on that date was 26.99 a share; total long-term debt was basically nil, and total cash was $380 million.
The chicken flu is causing consumers to have to pay a lot more for a basic necessity—eggs—and we hope for the health and well-being of all the little chickens. Yet, for now, AUERX is very interested in the investment potential of our nation’s largest egg supplier, Cal-Maine Foods, Inc. (CALM).
Holdings are subject to change at any time and should not be considered a recommendation to buy or sell any security. Current and future portfolio holdings are subject to risk.
Past performance is no guarantee of future results. The thoughts and opinions expressed in the article are solely those of the author. The discussion of individual companies should not be considered a recommendation of such companies by the Fund’s investment adviser. The discussion is designed to provide a reader with an understanding of how the Fund’s investment adviser manages the Fund’s portfolio.