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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