Cal-Maine Foods Inc (NASDAQ:CALM) and Vail Resorts, Inc. (NYSE:MTN) are trending in the first hours of trading after the companies reported their latest quarterly earnings before the bell on Monday. Let’s take a closer look at the reports and see if the smart money agrees with the market sentiment.
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Cal-Maine Foods Inc (NASDAQ:CALM) shares were up 50% year-to-date, following the U.S. outbreak of bird flu. The disease affected more than 48 million chickens and turkeys in the U.S. and caused egg prices to jump sharply. According to some reports, egg prices were more than twice what they were a few months ago. Many market participants expected Cal-Maine Foods Inc (NASDAQ:CALM) to benefit substantially from the outbreak.
It seems the quarterly earnings of the nation’s largest egg producer disappointed the bulls, however, because Cal-Maine ‘s stock is down more than 4% in morning trade. The company reported EPS of $2.95 versus expectations of $3.14. Revenue was $609.9 million versus expectations of $600.03 million. Egg sales increased 2.8% year-over-year, while the average selling price of egg shells rose by 65.7% year-over-year. Gross margin jumped by 20.41% to 43.13% and operating margin increased by 24.56% to 36.09%. The market could be selling off Cal-Maine because there hasn’t been another detected case of bird flu in the U.S. in more than 3 months.
According to our database of around 730 funds, the total number of investors long Cal-Maine decreased to 22 at the end of June from 24 at the end of March while the total value of hedge funds’ holdings increased to $348 million (13.8% of the float) from $224 million on March 31. Among the hedge funds that cut their positions in the second quarter were Jim Simons’ Renaissance Technologies, which decreased its position by 25% to 932,108 shares, and Ken Griffin’s Citadel Investment Group, which pruned its position by 32% to 141,430 shares. Going the opposite way was Royce & Associates, which increased its position by 12% to 3.59 million shares. Overall, given the fact that 35% of Cal-Maine’s float is short, hedge funds are bearish on the stock.