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Look at Your Breakfast for Trading Ideas

Sugar highs in stodgy dividend stock General Mills (GIS) have surprised investors


If I only gave you one guess as to the largest company making a new high, you would say General Mills (NYSE:GIS), the cereal king? Maybe not, but the breakfast behemoth has spooned tablespoons of sugar into shareholders’ bowls this year, rising to repeated new highs.

This is a great example of a stock that has looked for the past several weeks as if it is “up to much, too fast” and yet demand has been insatiable. I would call it a squeeze, but quite a few of its fellow major breakfast food makers are making the same journey, including  J.M. Smucker (NYSE:SJM), Kellogg (NYSE:K),  Conagra (NYSE:CAG) and Quaker Oats brand owner Pepsico (NYSE:PEP).

Put them together with the resurgence of the media brands like CBS (NYSE:CBS), Time Warner (NYSE:TWX), Disney (NYSE:DIS) and Comcast (NASDAQ:CMCSA) and you have a full morning meal complete with news, sports and entertainment.

I was going to say that a market this broad is healthy. But then I remembered the New York Times Magazine story that I read this weekend about how the food industry has addicted Americans to salt, sugar and fat through the twisted combination of science and psychology. So maybe it’s not so healthy for your waistline, but the bottom line is that investors should keep filling up their grocery baskets on every major dip this year. Top recommendations, on pullbacks only, are General Mills, Smucker, Kellogg, Pepsico and, in the beverage aisle, Femsa (NYSE:FMX) of Mexico.

InvestorPlace advisor Jon Markman operates the investment firm Markman Capital Insight. He also writes a daily swing trading newsletter, Trader’s Advantage which aims to capture profits of 15% to 40% and often as much at 100% to 200% in less than 90 days. 

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