The financial markets continue to be abuzz with talk about the recent lowering in position of General Mills, Inc. (NYSE:GIS) shares by Comerica Bank, as recorded in its latest Form 13F filing with the Securities and Exchange Commission. The bank’s high worth stake in the company had peaked at $9,588,000 towards the end of the last quarter – a position that was keenly monitored by industry analysts.
However, this move by Comerica Bank is only one factor contributing to a sense of uncertainty about General Mills’ future that has been brewing for some time now. Recent insider transactions have also raised eyebrows among seasoned investors, as top executives take advantage of opportune moments to sell off significant portions of their holdings.
Take insider Jonathon Nudi’s sales alone – on January 11th he sold over 10k shares at an average price of $84.49 and later repeated the move on March 28th to sell off an additional 3k shares at a higher average rate of $86.37 each. This brings Jonathon’s recently acquired cash reserves up to well over $1 million from his potential sale earnings.
And let’s not forget Bethany C. Quam’s action – on April 4th she sold just under 22k shares for an average price of $85.86; that translates into approximately $1.87 million leaving her pockets after the transaction concludes.
These insider transactions come amidst other worrying trends such as fluctuating share prices, low volumes traded and some perceived pressure arising from key business factors such as rivalries with competitors and uncertainties surrounding renewed collaborations with agency partners.
At press time, Friday’s opening share value for NYSE:GIS stood at $86.90 while its simple moving averages hovered around $80.07 (50-day) and $80.81 (200-day). Market capitalization stands at $51.04 billion while debt-to-equity ratio, quick and current ratios stand at 0.78, 0.32 and 0.54 respectively bringing into sharp focus yet another variable that should give investors pause for thought.
All things considered, it is easy to see why there is a sense of malaise surrounding General Mills’ potential for growth in the near future – especially given the unfolding global economic events – and it remains to be seen how market forces will play out in the months ahead. Regardless, this development on Comerica Bank’s behalf comes as no surprise – their ongoing act of rebalancing their investments continues to signal a strategic shift from their earlier position of holding large stakes in relatively stable Fortune 500 mainstays towards mid-cap companies.
General Mills: Snacking Their Way to Success
General Mills: On A Streak
General Mills, the company responsible for producing Cheerios and Lucky Charms as breakfast staples, reported a successful quarter with revenue reaching $5.13 billion, surpassing the analysts’ estimate of $4.97 billion. Alongside this achievement was an earnings per share (EPS) of $0.97 per share, which also beat projections of $0.91 by $0.06. General Mill’s staggering success can be attributed to strong sales growth in their snack foods such as Nature Valley granola bars and Annie’s organic snacks.
This recent triumph has not gone unnoticed by some prominent hedge funds who have recently expanded their stake in the food production giant. Almanack Investment Partners LLC bought shares valued at approximately $28,000 during the 3rd quarter while Selway Asset Management made a purchase worth around $31,000 (during the same period). TD Capital Management LLC and Clear Perspectives Financial Planning LLC also joined this collective movement with purchases totaling around $33,000 and $34,000 respectively.
Despite concerns raised in regards to General Mill’s falling cereal sales and reduced profits during previous quarters, these recent moves by hedge funds support positive analyst ratings for the company. According to Bloomberg’s analyst consensus rating report released last March 27th, General Mills has been given an overall “hold” rating with an average target price of $83.88 – higher than its current value on the stock market.
Leading analysts from Royal Bank of Canada also suggest optimism towards General Mill’s future possibilities when they reissued their “sector perform” rating along with raising their target price from $75 –$76 to a solid amount of %76 per share last March 24th; JPMorgan Chase & Co followed shortly after increasing its target price on shares from %76 to over %77 respectively.
General Mill’s good fortunes also mean plenty for insiders who take from their success to sell shares, such as insider Jonathon Nudi who made a sizeable transaction on Wednesday, January 11th – he sold 10,894 shares for $920,434.06 ($84.49 per share). Bethany C. Quam followed shortly after with 21,734 sales of her shares for $85.86 per share which totaled approximately over $1 million worth of shares.
Despite these insider sales exceeding the total amount of stocks purchased by hedge funds this quarter, General Mills has done remarkably well within its competitive industry with over institutional investors owning 74.48% of the stock (as reported). With this in mind General Mills’ future outlook appears bright and the company’s quarterly dividend payments seem stable- currently at $0.54 which will be paid out to investors on May 1st.
Source: beststocks.com
