Zacks Investment Ideas Highlights: XLP and General Mills


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For immediate release

Chicago, IL – July 6, 2022 – Today’s Zacks Investment Ideas feature highlights SPDR ETF XLP, General Mills, Inc. GIS.

A proven winner through several wars, recessions and bear markets

This year’s rollercoaster action has been fast and furious, leaving even the most patient investors a little frustrated as we turn the page to the second half of 2022. Pockets of the market that performed well during the period Last year’s bull run reversed course, while new leaders emerged. Sector rotation was on full display, with institutions shying away from growth and tech names and moving into more defensive positions.

While energy has been the hottest sector since the start of the year, many energy companies have come under attack in recent weeks as prices have fallen and signs of a spike in inflation continue to mount. ‘appear. The energy and agricultural companies that dominated the market in the first half of the year are now in their own bear market, with most companies having fallen more than 20% from their highs.

Unsurprisingly, one sector that has remained consistent in its performance despite all the volatility is consumer staples. The SPDR Consumer Staples ETF is showing resilience this year as the broader market continues its correction. Many individual constituents within the XLP ETF have reached new highs this year, which is another sign of strength. Take a look at the relative performance of XLP in 2022. Note that this relative outperformance is marked by a consistent uptrend and a pattern of higher highs. As investors, we want to target sectors, industry groups and individual stocks that are outperforming the market. It is crucial that we maintain maximum flexibility and adjust our approach to changing market conditions. Rather than triggering a knee-jerk reaction, it’s important to keep an open mind about the future. Preparing for a variety of outcomes can help us navigate this uncertain future.

The stock that we will analyze below represents more than 2% of the total XLP holdings. This long-term stock market winner is part of the Zacks Food – Miscellaneous industry, which currently ranks in the top 32% out of approximately 250 industry groups. Because it is ranked in the top half of all industries ranked by Zacks, we expect this group to outperform over the next 3-6 months. This group has fallen just 1.5% this year compared to a 21% loss for the S&P 500. By focusing on stocks in major sectors, we can significantly improve our investment success.

GeneralMills, Inc.

General Mills is a global manufacturer and marketer of branded consumer foods. The company sells products such as ready-to-eat cereals, yogurts, soups, dessert and baking mixes, frozen pizzas, snack bars, as well as various organic items and pet foods in retail stores. GIS also supplies its products to the catering and commercial baking industries. Some of the company’s most recognized brands include Annie’s, Betty Crocker, Bisquick, Cheerios, Fruit by the Foot, Pillsbury, Total, Wheaties and Yoplait. General Mills was founded in 1866 and is based in Minneapolis, MN.

GIS has exceeded earnings estimates in three of the past four quarters. The company recently announced fiscal first-quarter EPS of $1.12 per share last week, a surprise of 10.89% from the consensus estimate of $1.01/share. The consumer food supplier has posted a surprise 6.47% over the past four quarters, helping the stock rise more than 27% in the past year. As we can see below, the GIS has been a long-term market winner and has prevailed through multiple wars, recessions, bear markets and periods of high inflation spanning several decades.

Analysts raised their annual earnings estimate for GIS by 0.76% during the week. Zacks’ consensus estimate for FY2023 EPS now stands at $4.00 per share, translating to 1.52% growth over last year. Sales are expected to climb 1.92% to $19.36 billion.

Be sure to consider this consumer staple as a candidate for your wallet if you haven’t already.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for more information on the performance figures displayed in this press release.

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General Mills, Inc. (GIS): Free Inventory Analysis Report

Consumer Staples Select Sector SPDR ETF (XLP): ETF Research Reports

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