General Mills, Inc. (NYSE:GIS) – Clock That Stock
The Stock
General Mills, Inc. (NYSE:GIS) just reported earnings that were in-line with analysts estimates. But the catalyst behind the movement today is the lowered guidance for fiscal year 2011 of $2.46 to $2.48 per share, marginally below the $2.50 expected by the market. The stock is down around 3% by midday.
This is merely the first of many of lowered guidance to come and the outlook provided by this consumer staple company is minor in the overall scheme of things. The company has strong cash flow, reasonable margins and growth expectations of 7% to 8% that are certainly appealing in this struggling growth environment. The company just announced a 17% increase in its dividend for the 2011 fiscal year putting the yield at over 3%.
The stock has had a pretty good run for the past year and profit taking following this report was inevitable. The stock is currently holding a support of around $35 after topping out at $39 just a couple of weeks ago. Fundamental targets for the stock reach back up to around that level of resistance of $39. Technicals have yet to reveal a “buy” indication following the recently reported “sell” signal that has seen the stock decline by almost 6%.
Chart Courtesy of StockCharts.com
The Clock
We are just entering the period were this stock customarily rallies as a result of seasonal tendencies that favorably impact the stock. Gains between now and December reach 11% on average. Following Q4 earnings in the last 4 years, results reveal much of the same with gains reaching 8% by the end of the first quarter. This discounted market value at present presents an ideal entry point to benefit from the expected 6% increase in EPS over the next fiscal year.
| General Mills, Inc. (GIS) 36.9 | -0.5 (-1.34%) | |||||||||||||||||||||
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| Seasonality Analysis | ||||||||||||||||||||||
| Analysis has revealed that with a buy date of March 9 and a sell date of December 31, investors have benefited from a total return of 322.92% over the last 10 years. This scenario has shown positive results in 9 of those periods. | ||||||||||||||||||||||
| Conversely, the best return over the maximum number of positive periods reveals a buy date of May 11 and a sell date of December 16, producing a total return over the same 10-year range of 134.19% with positive results in 10 of those periods. | ||||||||||||||||||||||
| The buy and hold return for the past 10 years was 155.19%. | ||||||||||||||||||||||
| Technical Analysis | ||||||||||||||||||||||
| Support 2 | Support 1 | Pivot Point | Resistance1 | Resistance2 | The Numbers | |||||||||||||||||
| 36.27 | 36.58 | 37.01 | 37.32 | 37.75 | Most Recent Close: | 36.90 | ||||||||||||||||
| Support/Resistance Analys | Broke Upr Support (1) | 52-Week High: | 75.68 | |||||||||||||||||||
| MACD Analysis: | Positive/Decreasing | 52-Week Low: | 27.21 | |||||||||||||||||||
| MACD vs. Signal: | Below/Widening | Fib. Retracement: | ~ 23.6% | |||||||||||||||||||
| RSI Analysis: | Bearish Centerline Crossov | 50-Day MA: | 36.55 | |||||||||||||||||||
| Stochastic (Fast) Analysis: | Increasingly Oversold | 200-Day MA: | 34.65 | |||||||||||||||||||
| 50 vs 200-Day MA Analysis: | 50-day Above 200-Day MA | High Critical Level: | 38.30 | |||||||||||||||||||
| Year over Year Trend: | Strongly Gaining | Low Critical Value: | 59.41 | |||||||||||||||||||
| Critical Level Analysis: | Broke Below Previous Tren | Average Monthly Gain: | 2.9% | |||||||||||||||||||
| MFI Analysis | Below 50 Rebounding | Technical Rating: | 5 | |||||||||||||||||||
| Candlestick Analysis | Neutral/Indecision | On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels. | ||||||||||||||||||||
| Situational Analysis | ||||||||||||||||||||||
| Past Year | Advancing Sessions % | Return % | 10-Year Average | Advancing Sessions % | Return % | |||||||||||||||||
| Jun 29 thru Jul 29 | 47.6 | 6.6 | Jun 29 thru Jul 29 | 44.4 | -0.8 | |||||||||||||||||
| Best Return: 8.1% – Sell Jul 6 | Best Return: 3.4% – Sell Jul 13 | |||||||||||||||||||||
| Jun 29 thru Sep 27 | 43.5 | 14.2 | Jun 29 thru Sep 27 | 49.1 | 3.4 | |||||||||||||||||
| Best Return: 15.2% – Sell Sep 23 | Best Return: 6.2% – Sell Aug 26 | |||||||||||||||||||||
| Jun 29 thru Dec 26 | 52.8 | 29 | Jun 29 thru Dec 26 | 50.4 | 9.7 | |||||||||||||||||
| Best Return: 29% – Sell Dec 24 | Best Return: 13% – Sell Nov 26 | |||||||||||||||||||||
| Following Earnings Releases in General – Last 12 Periods | Following Q4 Earnings Releases – Last 4 Periods | |||||||||||||||||||||
| 12-Period Average | Advancing Sessions % | Return % | 5-Period Average | Advancing Sessions % | Return % | |||||||||||||||||
| After 30 Days | 49.2 | -0.1 | After 30 Days | 50 | 1.8 | |||||||||||||||||
| Best Return: 2.4% – After 15 Days on Average | Best Return: 4.1% – After 16 Days on Average | |||||||||||||||||||||
| After 60 Days | 49.5 | 1.4 | After 60 Days | 53 | 4.5 | |||||||||||||||||
| Best Return: 3.9% – After 29 Days on Average | Best Return: 5.8% – After 33 Days on Average | |||||||||||||||||||||
| After 90 Days | 49.8 | 2.7 | After 90 Days | 51.2 | 8.2 | |||||||||||||||||
| Best Return: 6.5% – After 65 Days on Average | Best Return: 9.6% – After 70 Days on Average | |||||||||||||||||||||
| Further Analysis | ||||||||||||||||||||||
| Sector: | Consumer Goods | Industry: | Processed & Packaged Goods | |||||||||||||||||||
| According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Consumer Staples Sector ranges from April 23rd through to October 27th. This period is to the opposite of that of the Consumer Discretionary sector, which follows the strength of the broad equity markets from October to April. Consumer Staples are a safe place to seek refuge when markets are volatile and market strength is not apparent. | ||||||||||||||||||||||
| Current Consensus Recommend: | Buy | |||||||||||||||||||||
| Recommendation 1-Month Ago: | Buy | |||||||||||||||||||||
| Recommendation 3-Months Ago: | Buy | |||||||||||||||||||||
| Disclaimer | ||||||||||||||||||||||
| Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed. | ||||||||||||||||||||||
| © 2010 EquityClock.com, member of the Tech Talk Financial Network | ||||||||||||||||||||||
Stocks mentioned in this post: GIS
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