Jennifer RadmanGeneral MillsGISCOMMENTJan 10, 2014

He's been accumulating into weakness. But remember, he and his team are active traders. They'd accumulate when the chart's in a trough, and then lighten up via covered calls when the chart peaks. Rinse and repeat.

If you want to know if this is a long-term bottom for the name, you have to look at a 10-year chart. It shows that we're back below the previous major low. So it's in deep value.

Here's a rule of thumb he uses:  Has the company materially changed from the last time it was at these levels? The answer would be yes for revenues falling, a big management change, or product changes. Doesn't believe any of that's the case here. Rising costs in basic commodities, so it's under cost pressures that it can't pass through.

Permanent? No, probably temporary. When those pressures alleviate, we should probably see a nice recovery in the stock. He wishes he could tell you exactly when ;)

They reported a solid quarter last week and reaffirmed their full-year forecast, but has tumbled since. Maybe the street didn't like that they didn't raise their guidance, or sales and earnings have been declining or hammered by high input costs. GLP-1 drugs are also a threat.

They report Wednesday. He didn't expect them to pay a 6.72% dividend yield. Is a consistent company, but inflation and the GLP-1 weight-loss drug are headwinds.

Today, they reported a blow-out quarter and restructuring that will cut $3 billion on costs through 2030. But packaged goods still face headwinds in GLP-1 drugs, rising costs and shallow growth. Rallies are short-term only.

The younger generation is much more aware of the ingredients in their good than past generations. This is not good for GIS, long term. Doesn't see revenue growth.

Technical pattern very weak. 200-day MA falling for quite some time (since 2023!), price is well below that. Appears to be facing earnings decline of ~8% for next few years.

Not even a value play -- for that, you need a low PE but also some growth.

These consumer names will recover, but doesn't know when. We're in a value trap now where a cheap stock could stay cheaper for longer than we like. Isn't worried about it and sees value in it. Pays a decent dividend.

Tastes are changing. These businesses are very hard. The only consumer staples he owns are COST and KO.

Rising prices in the food prep services industry are seeing a lot of inflation due to higher fertilizer costs (caused by the Iran war), but this is a temporary phase. A good time to buy this.

Inflation is killing them: input costs and food costs too much. They need to sacrifice margins and cut their prices.

At 13X forward earnings for a staples company and with a long-term outlook, we think an investor will do fine with General Mills (GIS). However, there is not much growth at the business currently and we think an investor can wait a bit for some better positive momentum before getting too serious with with a name like this.
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They put up weak numbers and shares slid 5% today. Consumer packaged goods are sector to avoid.

They make hugely popular cereals, very sugary, and so they could be a target of RFK Jr.'s health department. It yields 4.5%, the same as the 10-year T-bond, but that's still not enough to offset regulatory risk.

Pays a 4% yield and is cheap at these prices. He thinks the health secretary is dead set against the weight-loss drugs, so will benefit GIS.

Was upgraded today based on accelerating pet food sales. It reports Wednesday. He thinks that the incoming Health & Human Services Secretary, Robert Kennedy, will promote healthy eating, which clashes with GM's money-making sugary cereals.