Oct. 13 th, 2015 Columbus Day 2K15

Agenda 1)Pitch (example) – Mike Metz 1)Industry & company research 2

Pitch walk-through: (CALM) Mike Metz

Recommendation: Buy Share Price (as of 3/26/15): $38.81 Michael Metz Thomas Chadwick Cal- Maine Foods, Inc. (CALM:NASDAQ)

Thesis Leading producer Highly fragmented industry Price shock from Chinese ban Prop 2 Acquisitions Alignment between shareholders/management Strong dividend

Fundamentals Sector: Consumer Staples Current Price: $38.81 Market Cap: $1.87B Beta:.61 P/E: Dividend Yield: 1/3 Net Income Paid Quarterly Last Years Annual Yield:2.87% Revenue: $1.45B EBITDA:$183M

Egg Industry Products –Shell Eggs –Specialty Shell Eggs –Egg Products- Liquid, Frozen –Food Service –Export

Cal- Maine Foods, Inc. Largest producer/ marketer of shell eggs in USA 3 Business Segments –Specialty Eggs –Regular Shell Eggs –Liquid, Frozen, or Dried Produces domestically

Highest Total Layers- USA

CALM’s Top Locations/ Brands Southwestern Southeastern Mid- Western Mid- Atlantic Egg-Land’s Best®, Land O’ Lakes®, Farmhouse®, and 4-Grain®

Top 10 Customers

Vertically Integrated

CALM Egg Growth

Top-Line Growth

Customer’s Health Choices

Risk Factors: 1.Egg Price Volatility 2.Feed Price Volatility 3.Shift to other products 4.Seasonality 5.Government Regulation 6.Consumer Demand 7.Barriers of Entry

Egg Price Volatility

Feed Price Volatility

Risk of Consumer’s Shifting to Other Products

Seasonality

Government Regulation/ Barriers to Entry Prop 2 California Animal Rights Activists –Animal Concentration

Consumer Demand

CAPEX Strategy Growth and Acquisition of Fragmented Market Improved Facilities

Acquisitions Completed 18 acquisitions since 1989 Acquired remaining 50% of Delta Egg Farms for $17M- 2014

Latest Earnings Report 12/23/14 reported Q2 of 2015 Net Sales $378.6 million (6.9% yoy) 36.6 million Net Income $0.76 per share Fiscal 2014: Billion Dozen Shell Eggs Sold

Financial Highlights

Institutional/ Insider Holdings 12/23/14 reported Q2 of 2015 Net Sales $378.6 million (6.9% yoy) 36.6 million Net Income $0.76 per share Fiscal 2014: Eggs Sold *13G/A Filing on BlackRock Institutional purchased a 6.3% stake

Recent Decline Due to Misunderstanding China temporarily banned imports of US chicken, turkey, and eggs –Effective January 8, 2015 –Strain of (HPAI) in Pacific Northwest Occurs only in wild birds/ small domestic flocks Hundreds of miles away from US commercial prod. Exports to China account for 0.7% of total US shell egg production

Stock Performance

Comparable Competitors* *main peers are Rose Acre Farms, Moark LLC, Rembrandt Enterprises, Daybreak Foods CALMTSNSAFMHRLIBA Mtk Cap$1.72B$14.51B$1.83B$14.91B$2.61B P/E P/B P/S Beta EPS

Review Leading producer Highly fragmented industry Price shock from Chinese ban Prop 2 Acquisitions Alignment between shareholders/management Strong dividend

DCF Valuation

Questions?

Industry & Company Research Jamie Carlstedt

How do I find a company?

36 Resources Bloomberg terminal ETF Database MSU library resources Morningstar.com Finviz.com Wall Street Journal Equity Research Reports Google search for things! BEST!

37 Company website Company filings Presentations Earnings calls Other juicy info… “Investor Relations”

38 SEC FIlings 10-K= Annual Filing 10-Q= Quarterly Filing 8-K= Current Report DEFA14A = Proxy Filing

39 Sections of 10-K 1) Business 2) Risk factors 3) Unresolved staff comments 4) Properties 5) Legal proceedings 6) Market for registrant’s common equity, related stockholder matters & issuer purchases of equity securities 7) Selected financial data 8) Management’s discussion & analysis of financial condition & results of operations 9) Quantitative & qualitative disclosures about market risk

40 Sections of 10-K 10) Financial statements & supplementary data 11) Changes in & disagreements with accountants on accounting and financial disclosure 12) Directors, executive officers & corporate governance 13) Certain relationships & related transactions, & director independence 14) Principal accountant fees & services 15) Exhibits, financial statement schedules

Value Investing Porter’s 5 forces

- “W hether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” Recommended Reading The Intelligent Investor by Benjamin Graham

Hopefully not. Professional LinkedIn photos - $20 Next Wed., Oct. 21 after our meeting