Extra Guac, Now That Everyone's Talking About Chipotle

Much of the focus in the financial media over the last fifteen hours or so has understandably been on Bill Ackman's new stake in CMG. After all, it makes for great theater: Ackman and CMG both are seeking redemption after terrible press over the last year or two, most of it warranted, some of not. But bad press nonetheless, which makes for interesting bedfellows. 

In lieu of becoming too wrapped up in the Chipotle/Ackman drama, a name like Calavo Growers is smoothly flying under the radar. Shares of the avocado producer are rallying more than 10% as I write this, after earnings. What makes the CVGW earnings rally all the more impressive is that Calavo is often seen as a "volume" play. And, yet, the California drought clearly lowered the bar for them. So, to see the market pleased with the latest CVGW report is clearly bullish in this light. 

On the weekly chart, below, the summer consolidation may be ripe to resolve higher into autumn. 

I expect avocados to only gain in popularity for a variety of reasons in the coming years and decades. CVGW looks to be the quintessential pure play for avocados and potentially a buyout target, to boot.