Adam Hejl
3 min read
Shares of avocado company Mission Produce (NASDAQ:AVO) fell 6.1% in the afternoon session after it announced a potential one-time Mexican transfer tax payment of up to $5 million in connection with its proposed merger with Calavo Growers, Inc.
The disclosure was made in a supplement to the joint proxy statement/prospectus filed with the Securities and Exchange Commission as part of the merger process. According to the filing, the tax under review was a post-closing transfer tax that may be payable by Mission Produce after the merger’s completion. The company stated that based on its current analysis, it did not expect the amount to exceed $5 million. This potential liability introduced an unexpected cost associated with the merger, which likely concerned investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Mission Produce? Access our full analysis report here, it’s free.
Mission Produce’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 7% on the news that the company reported third-quarter results that beat profit expectations but provided a weak forecast for avocado prices. While the company posted earnings per share of $0.26, doubling the consensus estimate of $0.13, the positive result was overshadowed by its forward-looking guidance. Mission Produce management stated they expect avocado pricing to be approximately 20% to 25% lower in the fourth quarter compared to the same period last year. The company attributed the anticipated price decline to higher avocado volumes being available in both U.S. and international markets, a trend confirmed by reports of increased supply from key producers in Mexico and Peru. This weaker pricing outlook is raising investor concerns about the company’s future profitability, despite the strong quarterly earnings beat.
Mission Produce is up 19.4% since the beginning of the year, but at $13.83 per share, it is still trading 9.8% below its 52-week high of $15.34 from April 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Mission Produce’s shares 5 years ago would now be looking at only $692.54.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
