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Calavo Growers - >>> 3 Promising Plant-Based Stocks For a Growing Portfolio


Investor Place

by Tezcan Gecgil

November 12, 2021


https://finance.yahoo.com/news/3-promising-plant-based-stocks-191919715.html


Santa Paola, California-based Calavo Growers is one of the largest producers of avocados in North America. The company sells avocados to supermarket chains, wholesalers, foodservice providers, as well as other distributors.

Calavo Growers announced Q3 results in early September. Revenue increased 5% year-over-year from a year ago to $285 million. Adjusted net loss came in at $3 million, or 17 cents per diluted share, compared to an adjusted net income of $12.9 million, or 73 cents per share, in the prior-year quarter. Cash and equivalents ended the period at $1.3 million.

On the results, CEO Steven Hollister said, “Our results for the third quarter of this year were adversely impacted by inflationary pressures on labor, raw materials and freight, all of which accelerated as the third quarter progressed.”

Global demand for avocados is forecast to grow at a compound annual growth rate of 5.6% between 2020 to 2026. As it takes longer than 10 years to grow a new avocado tree, Calavo is positioned for long-term growth. In addition, the grower has extended its products to include fresh-cut fruits and veggies, addressing the growing demand for healthy food.

This is expected to mark the tenth consecutive year of dividend increases. CVGW stock currently offers a dividend yield of 2.7%.

Despite its strong fundamentals, shares have declined by 50% since its high in early March. The stock is near $42, down 39% so far this year. The pullback over the past six months offers an opportunity to buy CVGW stock at a bargain price. It is trading at 33x forward earnings and 0.75x trailing sales.

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