Opinions
Michael Underhill
Calavo Growers
CVGW-Q
TOP PICK
Sep 17, 2013
$30.010
Stock price when the opinion was issued
agriculture
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PAST TOP PICK
(A Top Pick Sept 17/13. Up 17.54%.) There is a dietary change in North America, and people are starting to use guacamole on sandwiches, instead of mayonnaise. Sourcing roughly 50% of their avocados from California, but have now shifted to Mexico, which is cheaper and which has generated free cash flow. 2% dividend yield.
agriculture
TOP PICK
Stockchase Research Editor: Michael O'Reilly Sales of avocados reached new highs during the pandemic. What slowed revenue growth for CVGW as the decline in food service demand that led to lower product prices. In fact, sales for the first half of 2021 have rebounded back as the economy reopens. Company guidance calls for a 40% increase in earnings. It pays a smallish dividend (which has grown for 9 consecutive years), that should be backed by a payout ratio around 55%. We would buy this with a stop loss at $55, looking to achieve $82 -- upside potential over 20%. Yield 1.69%
agriculture
Avocados. Looking at consumption patterns, trends, and how the US population has changed demographically. Usage is on the increase and it’s exponential.