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Bull of the Day: General Mills (GIS)

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Sometimes, being really boring can lead to exciting profits. You don’t have to take my word for it, just take a look at Berskhire Hathaway’s portfolio. Insurance companies, consumer staples, consistency. While everyone loves to talk about the hot new tech stock or cannabis stock hitting the market, there’s something to be said about the old, very profitable, guard. One way to find companies like this is to lean on the time-tested power of the Zacks Rank. Stocks with favorable ranks have solid earnings trends that have a tendency to continue quarter after quarter.

One such stock is today’s Bull of the Day, General Mills (GIS - Free Report) . General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit, and savory snacks, as well as organic products, including refrigerated yogurt, nutrition bars, meal kits, salty snacks, ready-to-eat cereal, and grain snacks.

Despite Goldman Sachs’ downgrade, General Mills is a Zacks Rank #1 (Strong Buy). The reason for the favorable rank comes from the recent trend in earnings estimates coming from analysts across the board. Over the last sixty days, two analysts have increased their earnings estimates for next year. That bullish sentiment pushed up our Zacks Consensus Estimate from $3.34 to $3.28.

It’s that sort of strong earnings trend which has helped underpin a move from the $36 level on Christmas Even to over $53 just last week. Today’s Goldman downgrade, coupled with a rough day for the market, saw shares dip to $48.25. Should the underlying earnings trend remain intact over the long run, today’s selling could be seen in retrospect as a great entry point.

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