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3 Reasons General Mills, Inc. Stock Could Rise

There's something about the stable, predictable nature of the cash generated by a consumer foods company. And with a business that has been around for almost 100 years, General Mills is one of the best. In an age when stocks move up, down, and all around, it's comforting to own this type of blue chip.

But even for a company as durable as General Mills, there are catalysts that could cause its stock to rise. These drivers are a must know for investors looking to add this company to their portfolio. So without further ado, here are three reasons General Mills stock could pop.

1: Annie's becomes a powerhouse

General Mills recently agreed to acquire natural foods maker Annie's for around $820 million. The deal provides it with a greater foothold in the organic space. From Jeff Harmening COO of General Mills U.S. Retail, "Annie's competes in a number of attractive food categories, with particular strength in convenient meals and snacks -- two of General Mills priority platforms."

Source: Haagen-Dazs.

For color, the Chinese seem to be particularly into Haagen-Dazs, and frankly: Who isn't? In the latest conference call CEO Ken Powell specifically mentioned Haagen-Dazs in China and that plans are to offer more flavors in more areas. Management will also support the brand with more marketing spend.

Foolish final words

In my opinion, the three catalysts to push General Mills higher is its continued excellent performance in China and other emerging markets. But the continued focus of its priority platforms on the four growing consumer groups will also play a roll. Lastly, its growth in the organic and natural foods space should matter. And while it's not gaudy, that last one could really drive the business.

While Annie's annual sales is a drop in the bucket to what General Mills already earns, do not underestimate the potential impact of this deal. In retail, it's all about shelf space and Annie's gives it additional shelf space in stores all over the country. Annie's also gives General Mills a greater presence in the more niche, natural foods market. This increased reach should bode well for shareholders.

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The article 3 Reasons General Mills, Inc. Stock Could Rise originally appeared on Fool.com.

Wade Michels has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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