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Chris L

Value Stock of the Day: General Mills

General Mills $GIS is trending towards yearly lows. Why the drop?

From @traderjoeZ:

$GIS, General Mills, Inc. / H1

1) Higher rates send down "bond proxy" dividend aristocrats

2) A good amount of debt

3) People eat less cereal than in the past

4) Fear that Amazon and E Commerce will kill "brands" and CPG

5) Poor earnings growth in the past years

Reasons to be bullish:

1. Timing: might be a good buying opportunity

2. Debt paydown

3. Supplementing the legacy brands with new, trendy ones. This includes Annie's Organics and Larabars

4. People still like differentiation and brands. It's human nature 

5. All CPG companies have had trouble with earnings due to low inflation. They couldn't hike prices much eg PG's rollbacks in 2012

$PG, Procter & Gamble Company (The) / H1

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