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Calavo -- >>> Avocado Grower Has One Influential Insider Sell Massive Block of Shares



April 19, 2016

by Gene Guzun



http://www.insidermonkey.com/blog/greenbrier-companies-inc-gbx-registers-cluster-of-insider-selling-while-top-execs-sell-shares-of-cavco-cvco-and-calavo-cvgw-444291/2/




Avocado Grower Has One Influential Insider Sell Massive Block of Shares

Calavo Growers Inc. (NASDAQ:CVGW) also had one of its most influential executives sell shares last week. President and Chief Operating Officer Kenneth J. Catchot discarded 14,666 shares on Thursday and 30,334 shares on Friday at prices between $55.02 and $56.41 per share, which trimmed his overall holding to 471,472 shares. Calavo Growers is a key player in the avocado industry, marketing and distributing avocados, prepared avocados, and other perishable foods to food distributors, supermarkets, and restaurants. The company conducts its business operations through three business segments: Fresh products; Calavo Foods; and RFG. The Fresh products segment involves the distribution of avocados and other fresh produce products. The Calavo Foods segment involves the purchasing, manufacturing and distribution of prepared products such as guacamole and salsa, while the RFG segment includes the manufacturing and distribution of fresh-cut fruit, ready-to-eat vegetables, recipe-ready vegetables, and deli products.

Calavo Growers reported net sales of $204.58 million for the first quarter of fiscal year 2016 that ended January 31, an increase of 5% year-over-year due to higher sales in all three segments. The largest percentage increase in sales was registered by the RFG segment (which accounted for 37% of net revenue in the quarter), which was driven by higher sales from deli products, vegetables platters and cut fruit. Fresh product sales, which accounted for 55% of net sales in the fiscal first quarter, increased by 1.3% year-over-year due to increased sales of tomatoes, which was partially offset by a decrease in the sales of Mexican- and California-sourced avocados. Meanwhile, Calavo Foods’ sales, which made up approximately 8% of Calavo Growers’ net sales, increased by 5.9% year-over-year due to higher sales of salsa and guacamole products. The Company’s management anticipates each segment to experience double-digit margin expansion for fiscal year 2016, saying that Calavo Growers will report record revenue and earnings per share for the fiscal year.

Shares of Calavo have advanced by 169% in the past five years and are 15% in the green year-to-date, so the COO might have decided to take some profits off the table to diversify his holdings. The stock is priced at around 25.3-times expected earnings, above the forward P/E multiple of 18.8 for the NASDAQ 100 benchmark. The smart money sentiment towards the avocado grower declined notably in the December quarter, with the number of money managers invested in the company shrinking to 11 from 18 quarter-over-quarter. Steve Cohen’s Point72 Asset Management had 136,900 shares of Calavo Growers Inc. (NASDAQ:CVGW) in its equity portfolio at the end of December.

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