Do you think General Mills (GIS) is a good stock to buy in todays market?

Question

The stock is near an all-time high, but with people watching every penny they spend, more and more people are deciding to eat in instead of going out to eat. General Mills products include: Cheerios, Betty Crocker, Yoplait, Hamburger Helper, Green Giant Veggies, Totino's Pizza and Pizza Rolls, Progresso Soup, Pillsbury Cinnamon Rolls, and the awesome cheesy biscuits at Red Lobster!

Answer 1

There certainly are a lot worse stocks out there.  Food is one of the last things people can do without, although prepared foods are further down on the list of withouts than the more basic variety such as potatos for example.  But it would not surprise me in the least if most people today have forgotten the skill of boiling a potato or for that matter how to peel one. But I do believe most folks know how to pop one in the microwave and set timer to 2 minutes and press the start button.

GIS is consistantly profitable and pays a dividend that is competitive with the current t-bill rate and  has been consistantly increased.  

How did Red Lobster get included here?  It is part of Darden.

Answer 2

I don't know if you mean "for the next 3 months" or "for the next 3 years".

I think the goal should be to make 20% per year in the market.  I base this on the fact that, historically, Warren Buffett's Berkshire Hathaway compounded at 18.1%, but he did it for 3 decades.

General Mills is an inflation hedge.  Their products have such wide and habitual appeal, the stock should weather the bear market and the higher costs of ingredients.

Most investors should use this type of process:

Use the Yahoo Finance screener to choose Mutual Funds with 5star Morningstar ratings and 20% return over the past 5 years.

Split your investments among some of the top funds, trying to buy different market segments.  For example, energy/oil and healthcare/pharmaceuticals.

Then run the Screener a couple times a year to adjust your portfolio.  You might achieve the 20% target.

- CarlD

Addendum:  My method is more aggressive.

I like stocks where the Analyst Opinion shows big gains at the MINIMUM TARGET.

For example IMAX should sell between $9 and $13 by analyst estimates.

http://finance.yahoo.com/q/ao?s=IMAX

Answer 3

It's a boring company. Won't make you lots of money, and won't make you lose too much money. Basically, if you're ready to invest in a low risk, low reward.. then go ahead.

My opinion though, short term, who knows what's gonna happen to the stock. But in the long run (3years-5years), this is a great company that's worth owning.

Answer 4

I like to target things near 52 week lows for long term, like MMM as a buy and hold.  I think food stock will go down as the price for corn is high so food costs will be increasing, and margins will shrink.

I agree with your argument though.

Answer 5

In my opinion, no.  Food companies are likely to go down for a while due to inflation and bio fuel competing for the same resources (corn).  I would buy biotech stock.

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