Why Did Cal-Maine Foods Stock Drop Today?

Core Viewpoint - Cal-Maine Foods is experiencing stock price fluctuations influenced by recent events in the egg market, particularly a salmonella scare leading to a significant egg recall, which has implications for supply and pricing dynamics in the industry [1][3][4]. Group 1: Market Impact - The August Egg Company announced a voluntary recall of 20.4 million eggs due to salmonella concerns, affecting multiple brands across nine states [3]. - Following the recall, Cal-Maine Foods benefited as it was not involved in the recall, leading to a nearly 4% increase in its stock price from the recall date until recently [4]. - However, as concerns over supply deficits diminish, Cal-Maine's stock has started to decline, closing down 2.5% on a day with no clear news catalyst [1][4]. Group 2: Investment Perspective - Current shareholders may be disappointed with the recent price decline, but this presents a buying opportunity for new investors, making the stock cheaper [5]. - Cal-Maine's stock is valued at a low 5 times trailing-12-month earnings, with analyst forecasts suggesting earnings of over $8 per share next year, resulting in an attractive forward price-to-earnings ratio of 12 [6]. - The stock also offers a generous 6.6% dividend yield, enhancing its attractiveness for potential investors, especially if egg prices remain high [7].