Monday, July 30, 2007

Calavo Growers Inc.

Calavo Growers Inc. is a NASDAQ listed security that has been trading in a range between $8.97 and $14.60 over the past year. With 14,296,830 shares outstanding, a recent price of $12.96 gives a total market capitalization of $183,714,271. While there are certainly larger companies, Calavo Growers Inc. has definitely earned its place in the pack. Last year, Calavo Growers Inc. created $0.57 in earnings for every share outstanding.

Calavo Growers Inc. is currently priced by the market at 22.70 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Calavo Growers Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.

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