Consumer staple stocks took hits earlier in the week
afterProcter & Gamble (
) reported disappointing earnings and gave lukewarm full-year
P&G gapped below its 50-day moving average in huge volume
Wednesday. Group peerColgate-Palmolive (
) also fell sharply in heavy turnover.
In IBD's Food-Packaged group, Big Cap 20 componentGeneral
) also took a hit, falling nearly 3% Wednesday in fast trade. It
was a day of institutional selling for the stock, but it's too
early to say its run is over, especially with its consistent
track record of earnings growth and solid yield of 3.1%.
Some of the company's more popular brands include Cheerios,
Betty Crocker and Haagen-Dazs.
After a flat-base breakout in February, the stock is still
holding above its 10-week moving average, currently around 48.
Strong stocks tend to find buying support after an initial
pullback to the 10-week line. Longer-term support for General
Mills is its 40-week moving average around 42, which happens to
coincide with its last breakout area.
In March, the company reported solid results. Earnings growth
accelerated for the second straight quarter, rising 16% to 64
cents a share. The results topped views by 7 cents.
Revenue growth also accelerated for the second straight
quarter, rising 8% to $4.43 billion, slightly ahead of estimates
for $4.36 billion. U.S. sales rose 2% to $2.66 billion.
International sales rose 24% to $1.2 billion, helped by its
recent acquisitions of Brazilian food maker Yoki Alimentos and
For the current quarter, profit is seen falling 9% from a year
ago due to higher costs and increased spending. Sales are seen
rising 6% to $4.3 billion. For fiscal 2013 ending in May,
earnings are seen rising 5% to $2.69 a share and 9% to $2.93 in