General Mills (GIS) is buying a 50% stake in Yoplait from PAI Partners for roughly $1.1 billion, Reuters reported Thursday, citing sources close to the deal.

The deal is a nice fit for both companies. Yoplait is second to Danone (DANOY) in the yogurt market. General Mills has the industry presence to promote the Yoplait brand, something that would benefit PAI.

For General Mills, Yoplait would add an another revenue stream to an already diversified conglomerate. Some of General Mills' products include cereals, Haagen-Dazs ice cream, Green Giant vegetables and Progresso soup. The company has already been distributing Yoplait for 30 years, so the distribution network is already in place.

Continue reading General Mills Likes Yoplait So Much It's Buying 50% of the Company

General Mills Likes Yoplait So Much It's Buying 50% of the Company originally appeared on BloggingStocks on Fri, 18 Mar 2011 09:00:00 EST. Please see our terms for use of feeds.

Aeropostale (ARO) primarily competes with other specialty retailers like American Eagle Outfitters (AEO), Abercrombie & Fitch (ANF), Gap (GPS) and Urban Outfitters (URBN). The company has seen steady growth in its profit margins over the past few years. EBITDA margins have increased from 10.4% in 2005 to around 19% in 2009 as Aeropostale has generated growth in comparable store sales, a metric used to measure retail sales strength.

We expect this trend to continue as the company explores ways to further optimize its supply chain, thereby improving operational efficiency. However, increasing raw material prices and a prolonged weakness in consumer spending could pose a headwind to our optimistic EBITDA margin outlook.

Continue reading Commodity Costs, Weak Consumer Spending Could Dampen Aeropostale Margins

Commodity Costs, Weak Consumer Spending Could Dampen Aeropostale Margins originally appeared on BloggingStocks on Sun, 06 Mar 2011 13:40:00 EST. Please see our terms for use of feeds.

The next year may bring higher global grain prices. Several factors are coming together to create supply-demand shortages. Let's first look at the demand side.

Globally, the demand for grains, both feed and consumer products, is increasing rapidly. Developing countries are coming out of the recession and their people are demanding more food products. Food prices are rising across the globe. A Wall Street Journal (subscription required) article states that the United Nations Food and Agriculture Organization said its Food Price Index rose 3.7% to 205 -- 44 points in November -- the fifth straight monthly increase. This takes the index to just 8 points below its peak in June 2008.

Continue reading Global Grain Prices Likely to Rise in 2011

Global Grain Prices Likely to Rise in 2011 originally appeared on BloggingStocks on Thu, 02 Dec 2010 11:30:00 EST. Please see our terms for use of feeds.

We have hundreds of indexes tracking everything that wiggles or moves. We are constantly searching for direction. Where is the market headed? Where is the economy going? Are we still in a recession? Will we see more growth next year? And on and on we go.

Well, here's a unique index -- two indexes in fact -- that track unusual products. The Commodity Research Bureau's raw industrials spot index, which includes print cloth, rosin and wool tops, soared to an all-time high last week, as reported in the Wall Street Journal. The Journal of Commerce/Economic Cycle Research Institute industrial price index, which tracks industrial metals, cotton, hides and tallow, hit a 2010 high last Friday -- just shy of its 2008 peak.

Continue reading What Is the Bull Market in Burlap Telling Us?

What Is the Bull Market in Burlap Telling Us? originally appeared on BloggingStocks on Wed, 17 Nov 2010 10:00:00 EST. Please see our terms for use of feeds.

The gold market exploded Thursday with the December contract up $45.50 to $1,383.10 per ounce, as reported in the Wall Street Journal.

As usual, there are lots of reasons for the spectacular rise. The two main ones are currency worries and inflation.

Let's take the currency issue first. The December U.S. dollar contract is hovering just above the 75 level. That level held and the dollar then rose to 89.11. Now it has come back down to the 75 level. A breach of 75 would signal a further move down.

Continue reading Gold Powers to a Record $1,383 per Ounce

Gold Powers to a Record $1,383 per Ounce originally appeared on BloggingStocks on Fri, 05 Nov 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Commodity Metals Decline on Investor Emotions

Commodity Metals Decline on Investor Emotions originally appeared on BloggingStocks on Wed, 26 May 2010 15:00:00 EST. Please see our terms for use of feeds.

Continue reading Rio Tinto Clamps Down in Australia

Rio Tinto Clamps Down in Australia originally appeared on BloggingStocks on Thu, 06 May 2010 12:00:00 EST. Please see our terms for use of feeds.

Is the world running on stimulus money or is there real demand for basic commodities?

What has been happening is that underdeveloped countries have been using stimulus money to stockpile raw commodities. Now there is a surplus. This, in turn, has led to a fall-off in commodity prices.

Continue reading January's Drop in Commodities Prices: Biggest in 13 Months

January's Drop in Commodities Prices: Biggest in 13 Months originally appeared on BloggingStocks on Mon, 01 Feb 2010 09:30:00 EST. Please see our terms for use of feeds.

During the financial meltdown of 2008, we saw a sharp sell off of commodity prices. As the year 2009 began, countries around the world had stockpiles of raw commodities such as oil, iron ore and copper. Then, during the second half of 2009, developing countries saw their economies surge with new growth. This, in turn, sparked renewed demand for basic commodities.

Now, as we enter 2010, the continued demand from developing countries is expected to continue, putting pressure of commodity prices. Scarcity of any commodity or product is the determining factor in the price. Oil, for example, traded at $80.00 per barrel last week.

Continue reading Are Commodity Prices Set to Rise?

Are Commodity Prices Set to Rise? originally appeared on BloggingStocks on Mon, 04 Jan 2010 10:45:00 EST. Please see our terms for use of feeds.

Continue reading General Mills 1Q earnings preview

General Mills 1Q earnings preview originally appeared on BloggingStocks on Tue, 22 Sep 2009 17:20:00 EST. Please see our terms for use of feeds.

After last year's crash, commodity prices have been sloshing around without too much direction. Oil has been a noticeable standout, however, moving from $32 per barrel to $74 per barrel.

Sugar has moved from about 15 cents per pound to 22 cents per pound, based on supply and demand factors.

Commodity traders are in a quandary about prices going forward. They are looking primarily at China and the U.S. dollar, reports BusinessWeek.

Continue reading Commodity prices hinge on China and the U.S. dollar

Commodity prices hinge on China and the U.S. dollar originally appeared on BloggingStocks on Mon, 24 Aug 2009 12:40:00 EST. Please see our terms for use of feeds.

Continue reading Is inflation peaking in many parts of the world?

Is inflation peaking in many parts of the world? originally appeared on BloggingStocks on Mon, 18 Aug 2008 09:59:00 EST. Please see our terms for use of feeds.

Benningan's

Benningan's, Steak and Ale go bankrupt as casual dining chains suffer originally appeared on BloggingStocks on Tue, 29 Jul 2008 15:30:00 EST. Please see our terms for use of feeds.

General Mills (NYSE: GIS), arch competitor of fellow cereal seller Kellogg (NYSE: K), posted some good news for shareholders on Monday. In an otherwise gloomy day that saw the Dow remain below the 12,000 level and inflationary pressures still exerting a hold over the market, General Mills proved that dividends are at least one island of safety in a sea of trouble.

The company indicated that it will now pay an annual dividend of $1.72 per share. Previously, the annual dividend was set at $1.57 per share. This is a nice example of double-digit appreciation of approximately 10%. Based on Monday's closing price, General Mills' stock now yields a hearty 2.7%.

As a long-term idea, General Mills is certainly one of the best. As I observed with Kellogg, you can put this one on perpetual dollar-cost-averaging. However, with the stock in 52-week-high territory, and with prices for commodities, especially corn, still exerting a negative effect on businesses, I'd be a bit cautious about entering just now. Is it possible one might get General Mills closer to a 3% yield? I can't predict the short-term future, but my gut says that a pullback is inevitable. Even with cool dividend increases, stocks can return to the low end of a 52-week range at any point. Just look at Coca-Cola (NYSE: KO) and the recent pressure its stock has been under. And Coke is a dividend stalwart. Nevertheless, I am bullish on General Mills' future. Just watch out for commodity trends, and perhaps remain patient for better prices on the shares.

Disclosure: I own Coke; positions can change at any time.

General Mills ups dividend and is near a 52-week high -- is it a strong buy? originally appeared on BloggingStocks on Tue, 24 Jun 2008 09:47:00 EST. Please see our terms for use of feeds.

The Federal Reserve will almost certainly announce another rate cut on Tuesday. The only open question is how much it will be. According to MarketWatch, "After the Bear Stearns news, market bets that the central bank will cut interest rates by 75 basis points next Tuesday jumped, pricing in a 100% chance of such a move, compared with 88% previously."

If the Fed cuts less than .75, the markets are likely to sell-off quickly and brutally.

But, there are several reasons that the rate cut may disappoint investors. First, some Fed governors have said that inflation remains a worry. Wheat prices have tripled in ten months. The cost of food and other agricultural commodities are likely to rise. Metal commodity prices are moving up, making component costs for businesses like the car industry sky-rocket. Oil is above $100 a barrel, and that's making its way into the gas and diesel markets.

The Fed may also decide that its best way to help the economy is continue to lend money directly to banks. The size of the current facility is $200 million, but that could go up.

The cut may only be half a percent. That may be the right decision, but the market will almost certainly not see it that way.

Douglas A. McIntyre is an editor at 247wallst.com.

What if the Fed only cuts a half a point? originally appeared on BloggingStocks on Sun, 16 Mar 2008 12:40:00 EST. Please see our terms for use of feeds.

The currency of our realm, the US Dollar, has been losing value for many years, but lately the results of this sad state of affairs have become increasingly more evident. Concerns are mounting on a global basis not just in the United States. The euro, once pegged at a buck, is now trading at $1.55, while gold has passed $1,000 and oil has continued its charge, breaking through the $110 per barrel mark.

While a good deal of this problem is home grown, the pain is being felt all around the world. We have read many stories about how the American economy is a smaller part of the global economy and becoming somewhat detached. This is nonsense. What has happened is that the global economy has become infinitely more integrated and like any integrated structure (the architect speaking), what occurs in one place is felt everywhere.

The Federal Reserve Board, led by Chairman Ben Bernanke, has been watching the economy in an extremely measured fashion, bordering on casual. To those who see beyond Bernanke's calm demeanor, one should imagine a stock trader of old, holding the ticker tape up to his eyes and monitoring every change, every blip in the market as the ticker tape machine clicks away, spewing out the latest market activity.

Continue reading Serious Money: The falling dollar creates global pain -- Part 1

Serious Money: The falling dollar creates global pain -- Part 1 originally appeared on BloggingStocks on Thu, 13 Mar 2008 15:05:00 EST. Please see our terms for use of feeds.

With crude oil well over $100/barrel, gold surging to $1000 per ounce and commodity prices at an all-time high, the question is whether the Federal reserve should keep dropping interest rates. While the bond market is pricing in a cut, should the Fed do it? The Fed's main mandate is to keep prices stable, i.e., to keep inflation under control.

Market watchers attribute the rise in commodity prices to surging inflation and are looking at these hard assets to provide a hedge.

"Every other day, we've got a new record," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore, told The Associated Press. "It's due to the phenomenon of investors getting into commodities, the hard assets, to find a safer haven and a hedge against inflation."

Over the past 12 months, wholesale prices rose by 7.4%, the largest yearly gain since late 1981. Clearly, the Fed is failing at its own core mandate. The Fed needs to return to what it is supposed to do and fight inflation. Inflation will be deadlier for the economy than a few quarters of slowing growth.

The fed should resist Wall Street calls for lower rates (to help bail them out of their own self-created problems), and focus on the greater issue of the economy. Fighting inflation is paramount to this goal.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com.

Should the Fed stop cutting interest rates? originally appeared on BloggingStocks on Tue, 04 Mar 2008 09:35:00 EST. Please see our terms for use of feeds.

Continue reading China takes another step to slow sizzling economy

China takes another step to slow sizzling economy originally appeared on BloggingStocks on Wed, 05 Dec 2007 13:53:00 EST. Please see our terms for use of feeds.

Agrium (NYSE: AGU) volatility is flat as AGU at record high on strong fertilizer demand. AGU, an agricultural retailer and fertilizer producer, closed at $54.38. AGU over all option implied volatility of 39 is near its 26-week average of 38 according to Track Data, suggesting nondirectional risk.

Terra Industries (NYSE: TRA) volatility is flat; TRA is near record on demand for nitrogen. TRA, an international producer of nitrogen products for industry and agriculture, closed at $31.26. TRA is expected to report EPS on 10/25. TRA over all option implied volatility of 52 is near its 26-week average of 50 according to Track Data, suggesting nondirectional risk.

Option update provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Fertilizer companies rally on rising grain prices originally appeared on BloggingStocks on Sat, 29 Sep 2007 12:40:00 EST. Please see our terms for use of feeds.

ExxonMobil Corporation (NYSE:XOM) made headlines reporting an annual profit of $39.5 billion. So what?!

So what if a company capitalized at $440 billion earns less than 10% profit. Suppose you bought the entire company "lock, stock and barrel"; wouldn't you expect to make far greater than that? You would be taking on a massive amount of responsibility and risk! Currency risk, political risk (you go deal with Putin in Russia and Chavez in Venezuela, or worse in Iraq or Iran or Africa), workman's comp for oil derricks in the Gulf Coast and elsewhere, environmental risk, government regulation -- the list is endless.

When I invest, my anticipation is at least a 10% return. Who in the entire investment world would do this, unless of course you were buying bonds paying 5% to 7% without any work. The 70-year stock market average is about 10%.

There is nothing wrong with Exxon Mobil's profit, given its size. It would be sad if they could not make 10%, and consider that they only made this with very high oil prices! If the profits were so high and prospects so good, why isn't there a run on the stock?

Continue reading $39.5 billion ExxonMobil profits: no big deal

$39.5 billion ExxonMobil profits: no big deal originally appeared on BloggingStocks on Wed, 07 Feb 2007 17:35:00 EST. Please see our terms for use of feeds.