Thursday, 17 January 2008

Selling another consumer "staple"

Reading this Mish article gave me another stock which looks to be doing far too well, given that it is a food producer getting double-f*cked by higher input prices and lower consumer spending and lower pricing power (I think).

General Mills (GIS) "products include ready-to-eat cereals, refrigerated yogurt, microwave popcorn, frozen pizza and pizza snacks, ice cream and frozen desserts, frozen baked goods, ready-to-serve soup, dessert and baking mix, and refrigerated cookies. The company also offers grain, fruit, and savory snacks; dry dinners, and shelf stable and frozen vegetable products; refrigerated and frozen dough products; and organic products, including soups, granola bars, and cereals."

Yum. Well, how do you reckon that business is doing just now? Paying more for the basic foodstuffs that they use to make it? Yep. Maybe falling sales if we are in a slowdown? Yep. Going to get worse? Undoubtably.

Looks like a good time to get in. Sure, it's not the top, but it's not a whole lot off it. I don't see any reason why it should get back up there either.

Selling almost $55k at $54.64. This is now my biggest single equity position.


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