GIS is a buy!Shares of General Mills (GIS) have been terrible to own lately. But they're finally finding support at a major support level (breakout from 2012-2013) at about $41.
They recently acquired Blue Buffalo Pet Foods, which should help drive growth to the bottom line, as the humanization of pets continues to accelerate.
At current prices, it's also sporting a solid 4.4% dividend (54% payout ratio, 5.2% 5-year annual average dividend growth, but new revenue/income streams should give them the ability to grow dividends more significantly going forward).
As a "consumer staple," it's no doubt out of favor... and that makes me like it even more! Buy when others sell, sell when other buy. Right?! :)
The valuation is attractive at 14x 2018's estimated E.P.S., and again, the new revenue/income streams from recent acquisitions should help raise E.P.S. estimates in the next few quarters.
To be fair in my analysis, the PEG ratio is a bit high at 2.3. Also, I've noticed some insider selling, so I'm curious about that. But insiders sell for a ton of reasons, so in and of itself, its not a reason to be scared away, just something to watch.
Option open interest is 22% higher than average, and favors bulls, with 1.2 calls for every one 1 put. I also wanted to point out that the MACD experienced a bullish cross (on weekly chart), so any dips from here should be bought!
Long this name as a core position in a long-term account, as well as long September calls in my trading account.
