Why Did Cal-Maine Foods Stock Drop Today?

Shares of Cal-Maine Foods (NASDAQ: CALM), America's biggest producer of chicken eggs, closed down 2.5% on Wednesday, a day in which there seemed no obvious news to serve as a catalyst for the decline.

To find the catalyst, you may have to flip back a few days on your calendar.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Bad news is good news for Cal-Maine

Specifically, flip back to June 6, when the August Egg Company announced a voluntary recall of its brown cage-free and organic brown eggs on worries of salmonella contamination. That recall affected multiple brands of eggs wholesaled by August to retailers, across nine states -- and removed 20.4 million eggs from the market, sparking worries of rising egg prices.

With August out of the market, companies not recalling their eggs -- companies like Cal-Maine Foods -- actually stood to benefit from the salmonella scare. From recall day through yesterday, Cal-Maine's stock price had risen nearly 4%. As worries over a supply deficit recede, however, Cal-Maine may have begun giving back its gains.

Is Cal-Maine stock a buy?

Current shareholders may not be thrilled with today's price decline, but new investors should be -- because it makes the stock even cheaper than it already was.

Valued on trailing-12-month profits, Cal-Maine stock costs a lowly 5 times earnings. And granted, last year's expensive eggs may become cheaper in the future, hurting profits. But based on analyst forecasts for more than $8 a share in earnings next year, Cal-Maine stock remains attractively priced at 12 times forward earnings.

Scramble in a generous 6.6% dividend yield, and Cal-Maine stock looks even more attractive. Unless and until you see eggs at your supermarket getting significantly cheaper, now could be a good time to buy Cal-Maine stock.

Should you invest $1,000 in Cal-Maine Foods right now?

Before you buy stock in Cal-Maine Foods, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cal-Maine Foods wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $689,813!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $906,556!*

Now, it’s worth noting Stock Advisor’s total average return is 809% — a market-crushing outperformance compared to 175% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cal-Maine Foods. The Motley Fool has a disclosure policy.