Option Trade 
General Mills, Inc. (NYSE:GIS) Puts
Tuesday, 28th June, 2016

** OPTION TRADE: Buy the GIS AUG 2016 65.000 put at approximately $1.70. Place a pre-determined sell at $3.50.

Note: No protective stop losses added -- but if you wish to do so make it $0.70.

by Ian Harvey

June 28, 2016

General Mills, Inc. (NYSE: GIS), a consumer-goods maker, will report its fiscal fourth-quarter results before the market opens tomorrow, June 29, with the consensus calling for earnings of $0.60 per share and revenue of $3.86 billion for the quarter. During the same period last year the company had earnings of $0.75.

Sales and profits in General Mills’ U.S. Retail segment have been soft due to lower demand amid changing consumer food preferences. In fiscal 2016, increased competitive activity in Yogurt and reduced display and merchandizing levels hurt results in the segment. To cater to the evolving consumer tastes, the company is investing in consumer-focused innovation and marketing along with the accelerating distribution of its natural and organic brands in fiscal 2016.

Management’s renovation and innovation efforts with a higher level of advertising is expected to lead to better organic (excluding currency headwinds and the Green Giant divesture) sales trends in the U.S. Retail segment in the fourth quarter, largely in cereals and snacks. Organically, sales growth is expected to turn positive in the fourth quarter, rising in a low single-digit range.

General Mills divested its Green Giant and Le Sueur brands of frozen and shelf-stable vegetables to food manufacturer, B&G Foods, Inc. BGS, in November last year.

However, like the third quarter, net sales, segment operating profit and adjusted earnings are expected to decline in the fourth quarter due to the Green Giant divesture, currency headwinds and difficult year-over-year comparisons. The year-ago comparable quarter gained from an extra week.

Adjusted gross margins are expected to decline year over year in the fourth quarter, reflecting the highest quarterly input cost inflation rate. Media expenses are expected to rise in a double-digit range, excluding currency impact which will hurt operating profits.

General Mills, Inc. has a one year low of $47.50 and a one year high of $66.88. The firm has a market capitalization of $39.34 billion and a P/E ratio of 27.05. The company’s 50-day moving average is $64.23 and its 200-day moving average is $60.52.

Goldman issued their verdict on General Mills, Inc. recently. The rating firm gave a Sell rating to this stock in a research note on May 24, 2016.

Also, several other equities research analysts have recently commented on the company.

• BMO Capital Markets restated a “hold” rating on shares of General Mills in a report on Sunday, March 27th.

• Sanford C. Bernstein increased their price target on General Mills from $61.00 to $62.00 in a report on Friday, March 25th.

• Stifel Nicolaus restated a “buy” rating and set a $66.00 price target on shares of General Mills in a report on Friday, April 8th.

• Citigroup Inc. restated a “buy” rating and set a $72.00 price target (up from $70.00) on shares of General Mills in a report on Monday, April 11th.

• Finally, JPMorgan Chase & Co. increased their price target on General Mills from $58.00 to $63.00 and gave the stock a “neutral” rating in a report on Thursday, March 24th.

Three equities research analysts have rated the stock with a sell rating, seven have given a hold rating and four have issued a buy rating to the stock. The company has an average rating of “Hold” and an average price target of $63.58.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

** OPTION TRADE: Buy the GIS AUG 2016 65.000 put at approximately $1.70. Place a pre-determined sell at $3.50.

Note: No protective stop losses added -- but if you wish to do so make it $0.70.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



Back to Stock Options Made Easy Home Page

Back to Option Trades from Option Trade – General Mills, Inc. (NYSE:GIS) Puts - Tuesday, 28th June, 2016



Get all the latest options news from
STOCK OPTIONS MADE EASY with our FREE newsletter


Enter Your Email Address

Enter Your First Name









Search Stock Options
Made Easy



Enjoy Relaxed or Fast-Paced Trading? Choose your Membership Style...

Whether you prefer to take a laid-back approach to your trading,

or to charge ahead in your options trading,

 Stock Options Made Easy Armchair Trader and Cut-to-the-Chase Trader Memberships put everything you need to succeed at your fingertips for just  $39 or $79 per month.






Subscribe to our FREE
newsletter for all the latest options news!


Enter Your Email Address

Enter Your First Name











Follow S_O_M_E on Twitter