Cal-Maine Foods Gears Up for Latest Quarterly Report

Short interest makes up a hefty percentage of the stock's available float

Assistant Editor
Dec 22, 2021 at 2:03 PM
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Egg producer Cal-Maine Foods Inc (NASDAQ:CALM) is up 0.8% at $36.06 this afternoon, with the equity set to snap its four-day losing streak. The company is slated to report fiscal second-quarter earnings after the market's close on Tuesday, December 28. Below, we will take a look at how CALM has been faring on the charts, as well as what the options market is pricing in for the stock's post-earnings move.

As alluded to above, CALM has struggled recently, falling below its year-over-year and year-to-date breakeven levels after shedding 10.5% over the last nine months. Meanwhile, the 320-day moving average has mostly kept a lid on what few breakout attempts the shares have made since May.

CALM Chart Dec 22

Looking at the food concern's earnings history, the stock has closed lower the day after earnings in four of the past eight quarters -- including a 3.8% decline in July. Over the past two years, the shares have swung an average of 2.4% the day after earnings, regardless of direction. This time around, the options market is pricing in a larger move of 5.6%.

Options traders are unusually put-skewed on Cal-Maine stock, according to its 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 85th percentile of its annual range. This means puts are being picked up at a faster-than-usual clip.

The skepticism toward Cal-Maine Foods has grown outside of the options pits, too. Short interest grew 3.4% in the two most recent reporting periods, and now accounts for 12.8% of the stock's total available float. At the security's average pace of trading, it would take shorts 19 days to buy back their bearish bets.

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