| 2013 | 2020 | 2021 (projected) | Long Term Debt to Equity | 6.5E-4 | 0.0857 | 0.0907 | Interest Coverage | 456.96 | 49.49 | 66.74 |
Is Cal Maine (NASDAQ:CALM) low volatility a good sign for stakeholders?
 | By Raphi Shpitalnik | Macroaxis Story |
Cal Maine is currently does not generate positive expected returns and assumes 1.1969% risk (volatility on return distribution) over the 90 days horizon. While many risk-averse stakeholders are getting carried away by overanalyzing consumer defensive space, it is reasonable to summarize Cal Maine Foods. We will cover the possibilities of Cal Maine's current volatility to continue through February. Cal Maine's very low volatility may have no significant impact on the stock's value as we estimate Cal Maine as currently undervalued. The real value, based on our calculations, is getting close to 41.50 per share.
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Reviewed by Gabriel Shpitalnik
Cal Maine Foods currently holds roughly 193.33 M in cash with 119.49 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 3.96. Volatility is a rate at which the price of Cal Maine or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Cal Maine may increase or decrease. In other words, similar to Cal's beta indicator, it measures the risk of Cal Maine and helps estimate the fluctuations that may happen in a short period of time. So if prices of Cal Maine fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is Cal Maine's Liquidity
Cal Maine financial leverage refers to using borrowed capital as a funding source to finance Cal Maine Foods ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Cal Maine financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Cal Maine's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Cal Maine's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Cal Maine's total debt and its cash.
Cal Maine Gross Profit
Cal Maine Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Cal Maine previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Cal Maine Gross Profit growth over the last 10 years. Please check Cal Maine's gross profit and other fundamental indicators for more details.
Cal Maine Volatility Drivers
Cal Maine unsystematic risk is unique to Cal Maine Foods and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Cal Maine you can also buy Brasilagro Adr. You can also mitigate this risk by investing in the consumer staples sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Cal Maine important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Cal Maine income statement and balance sheet. Here are more details about Cal volatility.Click cells to compare fundamentals
An Additional Perspective On Cal Maine Foods
The small pull down in market price for the last few months could raise concerns from stakeholders as the firm it trading at a share price of 37.54 on very low momentum in volume. The company executives did not add much value to Cal Maine investors in December. However, diversifying your holdings with Cal Maine Foods or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.2. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Cal Maine Foods. Please refer to our Terms of Use for any information regarding our disclosure principles.