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Thursday, March 24, 2011

The General Mills (GIS) Call

I make a habit of writing notes for any conference call that I tune into; and especially when I own some stock in the company. As I stated in the past that I would review conference calls here on the blog, here are some highlights from the notes I took during the General Mills (GIS) call ...

  • Overall, I found the call positive.
  • An overall tone I began to notice was that the street seems to worry a bit about continuing and stacking growth in sales. Last call, it was commodity inflation and costs. Later in the call, management fully admitted that it would be a bit unrealistic to stack volume to increase as it has, and meet guidance. They are therefore relying on price realizations to meet targets they've outlined (If you are new, 'price realizations' does not necessarily mean, rising the cost of the product, but a manipulation of discounts on the list price to try to increase profit margins substantially).
  • The Yoplait deal: Management continues to insist it was not forced into this transaction, but that they saw a $40 Billion category, that works in all types of international markets, with a low cost; and they wanted to take advantage of that opportunity, since it was inline with their overall worldwide growth strategy. They also insist that they see no substantial 'real' pushback from the French government on the deal, and they are confident it will close. I'm always more of the opinion that nothing is done, until it's done. But at least they aren't modeling any revenue on projections or guidance with the assumption that the deal will complete.
  • Cereal sales are a bit worrisome. Management believes this will strengthen. JP Morgan analyst believes it will strengthen. I'm not sold on that one yet.
  • I found it humorous (and I admit, somewhat satisfying) that not 5 minutes into the call, they were discussing input costs. Perhaps "someone" out there will discover as others have, that although I do make mistakes as anyone does ... this is my field, and 'generally' I know what I'm talking about.
  • I also found it humorous (and again, somewhat satisfying) that the tremendous growth in China was highlighted, and in the B.R.I.C. countries overall, with China alone gaining 10% increase.

Here is a link to that call for review ...

On a somewhat related note? I will mention here what I mentioned on the Facebook page; that obviously I have been watching the divvy section of the book more as of late.

As I mentioned on Monday, any further drawdown in that section of my book would have possibly triggered a "3 sister redistribution" Things are looking good this week on that score however as market recovers ... and we recover over a percentage point ( I hit 3% drawdown on one section of the book on a year to date basis (I'm still up overall), and I flip out, lol )

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Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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