CVGW

Calavo Growers ($CVGW) CEO Acquires $2.4M in Stock Over Three Days as Executives Pour $2.8M Into Company Shares

04/17/2025 19:51

Senior executives of Calavo Growers ($CVGW), including the CEO, have purchased approximately $2.8 million worth of company stock over a two-week period from early to mid-April. CEO Lecil E. Cole made a particularly strong statement by acquiring nearly 100,000 shares over just three consecutive trading days. According to filings with the Securities and Exchange Commission (SEC), Cole purchased approximately 100,000 shares worth about $2.4 million between April 11 and April 15. Notably, he acquired around 79,000 shares for $1.94 million during just two days: April 14 and 15. Prior to Cole's buying spree, Officer Michael A. Browne purchased a total of 11,000 shares for $257,000 in two transactions on April 2 and April 10, while CFO James E. Snyder acquired 3,213 shares for $75,000 on April 10. This cluster of insider purchases came approximately one month after Calavo's quarterly earnings release for the period ending January 31. On March 12, the company reported adjusted earnings per share of 33 cents for Q1 fiscal 2025, exceeding analyst expectations of 29 cents. Revenue increased by 21% year-over-year to $154.39 million, representing a significant turnaround from the loss reported in the same period last year and confirming improvements in the company's profitability. Calavo Growers, established in 1924, specializes in marketing and distributing avocados and other perishable foods through two segments: 'Grown' (fresh avocados, tomatoes, and papayas) and 'Prepared' (guacamole products and avocado pulp). The company reported total revenue of $688.32 million last year with net income of $13.79 million over the trailing twelve months. One positive development for the company has been the stability in the supply of Mexican avocados, its primary import item, following the temporary suspension of U.S. tariffs on Mexican imports amid heightened trade tensions earlier this year. According to reports from early February, Mexican avocado exports to the U.S. reached 110,000 tons ahead of the Super Bowl season, maintaining levels consistent with the previous year. The stock has shown an upward trend following these substantial insider purchases. Since CEO Cole's first buying date on April 11, when the stock traded at $23.97, shares have risen approximately 2.9% to $24.66 as of April 16. The stock peaked at $24.80 on April 14, the day of Cole's largest purchase, representing a 3.5% gain. Despite this positive movement, Calavo's stock remains significantly below the average analyst target price of $35.00, suggesting potential upside of approximately 42% from current levels. The company also maintains strong financial health with $48.49 million in cash against just $24.79 million in total debt, resulting in a low debt-to-equity ratio of 12.22% and a robust current ratio of 2.23. Industry experts interpret this insider buying cluster as a strong vote of confidence from management in the company's business outlook. Particularly, the CEO's consecutive large purchases are typically viewed as a signal anticipating positive developments within the next 12-18 months. This insider buying activity is especially notable considering the broader market context. In early April, U.S. markets experienced significant volatility after the announcement of 104% tariffs on Chinese imports, which wiped approximately $5.8 trillion in market value from S&P 500 companies. However, markets rebounded after a 90-day tariff suspension was announced on April 9. Against this backdrop, the coordinated purchasing by Calavo's management team demonstrates their conviction in the company's fundamentals and growth potential. While Calavo Growers' stock continues to exhibit volatility, the combination of increasing avocado demand, improving financial performance, and strong management confidence could serve as catalysts for future stock recovery. Investors should monitor the upcoming quarterly results, avocado market price trends, and potential changes in U.S.-Mexico trade policies in the coming months.

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