Therefore, CVGW stock might be one for the shorts
Calavo Growers, Inc. (NASDAQ: CVGW) is an international consumer and agricultural products company primarily engaged in the global avocado industry. Calavo Growers packages and distributes avocados and other fruits as well as freshly prepared groceries to restaurants, grocery retailers, mass marketers, grocers and wholesalers worldwide. This morning CVGW is trading unchanged at $ 74.07.
Last month, Calavo Growers announced that it would publish its financial results for the second quarter of fiscal year 2021 after the market closed on Tuesday, June 8th. In recent history, CVGW has exceeded Wall Street earnings expectations in only one of its last four earnings reports.
For the second quarter of fiscal 2020, Calavo Growers missed analyst estimates by $ 0.08 and reported earnings per share (EPS) of $ 0.40. For the third quarter of fiscal 2020, CVGW increased its earnings per share to $ 0.73, beating expectations with a margin of $ 0.01. For the fourth quarter of fiscal 2020, Calavo Growers reported a drop in revenue to $ 0.34 per share, missing estimates by $ 0.30. For the first quarter of fiscal 2021, Calavo Growers posted earnings per share of $ 0.17, falling short of expectations by $ 0.03.
Calavo Growers stock is up about 25% year over year and is up 32% since hitting its two-year low of $ 56.06. Additionally, Calavo Growers stock is up 7.8% year-to-date, but CVGW is currently trading about 13% from its 52-week high of $ 85.40. Calavo Growers also has a forward dividend of $ 1.15 and a dividend yield of 1.60%.
From a fundamental perspective, Calavo Growers did poorly on almost all fundamental aspects. CVGW currently has a relatively low cash balance of $ 8.17 million, which is made worse by the company’s total debt of $ 108.55 million. Overall, Calavo Growers will need to provide some positive earnings numbers to maintain or regain investor confidence. For now, however, CVGW looks like an opportunity for short sellers, given the recent growth in Calavo Growers stock and the company’s poor fundamentals.