GIS - General Mills Is A Top Consumer Staples Compounder

2024-05-01 00:34:40 ET

Summary

• Compounders are one of our favorite types of opportunities in the market.
• Today, we're covering General Mills, a company with a strong track record of execution and a disciplined capital management approach.
• Growing demand for shares, combined with a shrinking supply of them, leads us to believe that GIS will drive strong capital appreciation for shareholders over the mid and long term.
• With shares trading at a historically attractive price, we rate GIS a 'Buy'.

When it comes to classifying similar types of opportunities in stocks, there are a number of common 'genres' that investors will often refer back to when trying to describe an opportunity set. Common genres include buckets like Special Situations, Turnaround Stories, Commodity Plays, and other things in that vein.

For example, Commodity Plays are often companies that have heavy price exposure to commodities, either on the expense side, or the finished product side, and thus often trade in tandem with those underlying prices. Gold miners, like Newmont ( NEM ) have relatively fixed costs of mining, but they sell what they produce on the open market, and thus their profitability is largely determined by the price of gold at any one time....

For further details see: