CVGW

Calavo Growers($CVGW) CEO Snaps Up $142K in Shares Amid Price Dip; Analysts See 45% Upside Potential

04/03/2025 17:33

Calavo Growers Inc ($CVGW) is drawing investor attention as CEO Michael Browne recently executed a substantial purchase of company shares. On April 2, Browne acquired 6,000 shares at an average price of $23.69, totaling approximately $142,140. The purchases were made across various price points ranging from $23.67 to $23.73, according to regulatory filings. Based in California, Calavo Growers is a leader in the marketing and distribution of fresh produce such as avocados, tomatoes, and papayas, as well as prepared avocado products like guacamole. The company operates through two main segments: Grown and Prepared, serving global markets. Shares of $CVGW have experienced significant volatility over the past six months. The stock climbed from the mid-$20s to nearly $29 between September and November 2024, before entering a downward trend. Since early 2025, the shares have fluctuated between $22 and $24, with a modest recovery beginning in mid-March. Currently trading at $23.51, the stock remains about 23% below its 52-week high of $30.58. Examining the company's financials, Calavo reported trailing twelve-month revenue of $688.32 million and net income of $9.61 million. Notably, the company has shown improving performance in recent quarters. For the quarter ended January 31, 2025, Calavo posted adjusted earnings of $0.33 per share, a significant improvement from the loss of $0.01 per share in the same period last year. While the $154.39 million in revenue fell short of analysts' expectations of $160.15 million, it represented a 21% increase year-over-year, indicating a positive trajectory. This performance improvement coincides with stabilization in the avocado industry. Ahead of this year's Super Bowl season, Mexican avocado exports maintained levels similar to last year at 110,000 metric tons, and trade tensions between the U.S. and Mexico have eased, improving the import environment. Wall Street analysts maintain an optimistic outlook on Calavo. The current consensus rating is 'Buy,' with a 12-month price target of $35.00, suggesting an upside potential of approximately 45% from current levels. Additionally, the company offers an attractive dividend of $0.80 per share, yielding 3.33%. In this context, CEO Browne's substantial share purchase carries significant weight. Generally, CEO stock acquisitions signal strong confidence in the company's future growth prospects and an assessment that the current share price is undervalued. Browne's decision to buy at a point when the stock has fallen considerably from its 52-week high suggests he views the current price as an attractive entry point relative to the company's long-term value. While Calavo's high P/E ratio of 44.50 might appear concerning, the forward P/E of 13.09 reflects expectations for significant earnings improvement. Furthermore, the company's revenue increased by 11.35% in fiscal year 2024, and losses decreased by 87.10%, both positive indicators. As a small-cap stock, Calavo Growers presents an intriguing opportunity for value investors, particularly given the steadily increasing consumer demand for healthy foods like avocados, combined with improving financials and the CEO's confident purchase. However, investors should consider the inherent volatility of small-cap stocks and the seasonal fluctuations typical of the agricultural produce market when making investment decisions.

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