Recent Buy – GIS

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Crepe Made from GIS flour - Pillsbury

Really guy, where is the correction? No correction, I shall buys companies that are down by  20% just to be on the safe side. And that is the case when I bought CVS, Cardinal health (CAH), or END (75%), even WMT, etc.

Anyhow, I bought 20 shares for my ROTH IRA, 10 shares for my IRA, 10 share for my taxable account. So here goes the analysis:

What is GIS?

Basically, anything processed …. 🙂

General Mills, Inc. manufactures and markets branded consumer foods in the United States. It operates in three segments: U.S. Retail, International, and Convenience Stores and Foodservice. The company offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain and fruit and savory snacks, stable and frozen vegetables, and ice cream and frozen desserts, as well as various organic products, including meal kits, granola bars, and cereal. The company markets its products under the Annie’s, Betty Crocker, Bisquick, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, Fiber One, Food Should Taste Good, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto’s, Go-Gurt, Gold Medal, Golden Grahams, Häagen-Dazs, Helpers, Jeno’s, Jus-Rol, Kitano, Kix, La Salteña, Lärabar, Latina, Liberté, Lucky Charms, Muir Glen, Nature Valley, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Raisin Nut Bran, Total, Totino’s, Trix, Wanchai Ferry, Wheaties, Yoki, and Yoplait names. General Mills, Inc. also supplies branded and unbranded food products to the foodservice and commercial baking industries. It sells its products directly, as well as through broker and distribution arrangements to grocery stores, mass merchandisers, membership stores, natural food chains, e-commerce grocery providers, commercial and noncommercial foodservice distributors and operators, restaurants, and convenience stores, as well as drug, dollar, and discount chains. The company operates 530 ice cream parlors; and franchises 344 branded ice cream parlors. General Mills, Inc. also exports its products primarily to Caribbean and Latin American markets. The company was founded in 1928 and is headquartered in Minneapolis, Minnesota.

But I don’t eat processed food, why the heck I buy the stock?

Actually, come to find out, on our trip to St. John, we ate energy bar for lunch/snack in between the two bays and on our hike. The Nature Valley bars were sweet, pack with all sorts of yummy cashew, peanuts, walnut, oat meal, chocolate … I really like it.

I break bread from scratch, so Pillsburry All-Purpose-Flours serves me well

My point is, the company is a consumer stable company, even the most picky chef or eater like myself still spend money on their products. That means the company adapts well to the changes in the world. They modify or make the right acquisitions to stay competitive, to win/sustain market share. 

Alright, here are the numbers:

52-week high $72.95, current price $57.65 that’s 20% discount

Yield: 3.33%

PE: 22

Beta is 0.55 .. the stock price doesn’t move much at all

Here are some Perks:

  • 3.33% dividend yield and 7% to 9% expected growth, General Mills shareholders can expect total returns of 10% to 12% a year, not bad for the “boring” packaged-food business.
  • The company plans to drive sales by focusing on what consumers are demanding: healthy food products.
  • General Mills is proudly highlighting its Cheerios and Chex cereals as “gluten-free.” The company plans to include “gluten-free” on its Lucky Charms packaging in the second half this year.
  • 118 years of dividend
  • General Mills controls 31.3% of the ready-to-eat cereal market in the United States.

Risks:

Increase in interest rate will hurt consumer staple stocks. During the financial crisis, the interest rate was at 0.01% if you leave the money in the bank. It made a lot of sense for people put money in stocks like GE, GIS, JNJ who pay around 3%. Now that the interest rate can move back to 1%, 2% or 3%, and a correction is due. People might sleep better putting money in the bank earning 3% at the T-note. Waiting on the sideline for a correction. That means, stocks like GIS will continue to fall. I don’t know where the floor is, but if it falls below $50. I’ll definitely picking up 100 shares. LOL 🙂

Here are some of my fellow bloggers that have also made the purchases:

Recent Buy – General Mills, Inc. (GIS) – Dividend Hawk – blogger @ $59.xx

Young Dividend: Recent buy: GIS $2124 @ $59.xx

Captain Dividend: Recent Buy – General Mills (GIS) in 2014 @$49.xx

Dividend Lord: 8 Recent Buys – EMA, ABT, CSCO, CVS, GIS, HCN, PG … @$61.xx

 

With all of these compelling reasons, I bought 10 shares for my taxable account @$57.xx, that would give me an extra $19.2 in forwarding dividend.

What do you think about my recent buy? 

Please feel free to put a link to your website under the comment if you’ve bought some yourself and made the analysis.

 

Crepe Recipe:

2 eggs

3/4 cup of flour

1 cup of milk

1 teaspoon of vanilla

Butter bar to wet the pan

a little bit of sugar if you like it sweet (we don’t put extra sugar as we would eat it with maple syrup)

**Fruit like banana, and strawberry, blue berry or anything from a crepe stand

Steps:

Mix the egg, with flour, then pour the milk, add more milk if it too many clumps. The batter needs to be runny.

**Don’t worry, the milk and egg will have a chemical reaction, and your batter will cake into a crape, the flour is there to give it strength so you can flip the crape. 

**If you want to rest your batter for 15 minutes while you’re chopping the vegetable, it’s better. 

 

GA

8 Comments

  1. Great buy. GIS is on my April watch list and as that stock continues to drift lower it’s looking more and more attractive. Still has a safe dividend and juicy yield too. I may soon make that list up there of fellow GIS buyers. Thanks for that recipe too!

    • You know where I go for inspiration! LOL 🙂 I love your monthly watch list on your website. Keep sharin, bro. When the whole world is selling manufacture, you recommended manufactures, look where they are now? up 30-50%. That’s what I’m talking about.

    • I saw your new buys on your March update. I’m glad to be your fellow shareholders! 😛

      GIS is one of those that doesn’t swing as much. When there is a market collapse, when every stock is falling, GIS held steady, that’s what I like about it.

      Whether people likes to eat out or not, everyone still go back to their basic cereal, yogurt and snacks. Their business is very much sustainable.

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