BY: Claire Blumberg
Claire Blumberg, a Daly Elementary School fifth grader student, placed second in New York – and ninth in the nation – in the SIFMA Foundation’s InvestWrite student essay competition, in the elementary school division.
I chose to research the stock General Mills which is traded on the New York Stock Exchange under the ticker symbol GIS. General Mills, which was founded in 1928, is in the processed and packaged goods industry. Some of the products they make and sell include cereal, yogurt, frozen vegetables, snacks, and other food items. Most people are familiar with the brands of food that General Mills manufactures. Some of the more popular ones are Cheerios, Betty Crocker, Pillsbury, Green Giant, Nature Valley, Old El Paso and Häagen-Dazs.
General Mills would be a good long and short term investment based on their past history, their market share in growing food categories, and their plans for more international growth. The people that have run General Mills have consistently done a very good job and the stock usually does better than the market in general. The stock also has paid a good dividend to its investors for more than 100 years. General Mills has the number one or number two brand in many growing categories, which will also help the stock in the short and long term. Finally, General Mills has plans to sell more products internationally, since only twenty five percent of their sales come from overseas right now.
There are many things that could affect the stock price of a company. Some of these things are out of the control of the company but there are also ways that the company can improve the value of the stock. For example, one event that could lead to the increase of the stock price would be the discovery of a new ingredient that can replace fat or sugars without adding many calories to the product, but tastes just as good, or even better. In order to come up with this new ingredient General Mills would have to increase their spending in research and development. But the result should be a higher stock price.
General Mills makes the most money from ready-to-eat cereals including sugary brands such as Lucky Charms, Cheerios, Trix, and Cinnamon Toast Crunch. One of the main complaints about these cereals is that they contain too much sugar. As the public becomes more concerned about the diets of their children and obesity, sugary cereals may become less popular. If General Mills creates a safe, low calorie ingredient to replace the sugars, it will have several positive results. More adults will consider buying it for their children for breakfast and also for snacks. Adults will also consider it for a healthier snack if they are watching their weight or dieting. If this ingredient becomes popular, General Mills will sell much more of their cereal products. The sales and profits will rise and so should the stock price.
There is a lot of information available about General Mills because it's a very popular and big company. I chose to use the Internet to figure out my decision. I used the General Mills website to find out about the business they are in, the products that they sell, and their plans for the future and what they should improve on. The website has an investor’s fact sheet that was very helpful to find out other facts you should know about the company. Another website I used was Yahoo Finance. This site helped me find information such as the ticker symbol, the industry they are in, the size of the company, where the stock is sold, and the stock price.
I enjoyed playing in the Stock Market Game a lot. It was a very good learning experience that made you feel like you were actually trading stocks. The most interesting thing I learned in the game was that you should never buy all of your stocks in the same sector. If all of your stocks are in the same sector and something happens to hurt that sector you could lose a lot of money. It is better to spread out your stocks into different sectors. This is called diversification. Participating in the Stock Market Game was a lot of fun and I look forward to learning more about stocks and investing in the future.