General Mills, Inc. (NYSE:GIS) – Technical Analysis
Highlighting: General Mills, Inc. (NYSE:GIS)
Of the 1645 stocks analyzed on Friday, 1392 advanced, 229 declined, and the remaining 24 were flat on the day. Stocks averaged gains of 1.59% on volumes 6.5% lower than the day prior. Gains across the capitalizations averaged 1.16%, 1.57% and 2.32% for large-caps, mid-caps and small-caps, respectively. The percentage of stocks listed as overbought according to stochastics continues to worsen, now at 65%. Further moves to the upside appear unsustainable without correcting.
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 322.67% 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 134.24% with positive results in 10 of those periods.
The buy and hold return for the past 10 years was 155.15%.
Comments:
We are approaching the peak period of strength for shares of General Mills, which customarily see gains averaging 10% between the end of July and the end of December.This consumer staple has come under pressure since offering lower guidance during its fiscal year-end report on June 29th in which results came in-line with estimates.The company projected that fiscal year 2011 results would be $2.46 to $2.48 per share, marginally lower than the $2.49 analyst expectation.The stock is currently trading around the levels witnessed during that June 29th dip.
Despite the period of seasonal strength approaching, there is some concern amongst the technicals.The stock "gap filled" following the June 29th slip, creating the appearance of the right shoulder of a head-and-shoulders chart pattern: a negative for the stock.In addition, during the past couple of sessions of bullish activity, the stock continues to underperform the market.
However, the stock remains one to watch as a potential defensive play.The stock holds an analyst "buy" rating and targets indicate a value at least 10% above current levels.The stock pays a dividend yield of just over 3% and the beta is a low 0.25, suggesting low volatility.Before investing, investors should seek conviction to an upside move as suggested by increased volume, outperformance versus the market, and continued momentum growth.These points are notably absent, however, with technicals showing initial signs of bottoming and the period of seasonal strength approaching, this stock will remain on our radar.
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Disclosure: Mr. Vialoux does not own securities mentioned in this report.
Disclaimer: Comments and opinions offered in this report at 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.
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