For decades, cereal has been the go-to breakfast for Americans, because it's quick, easy and relatively healthy. That makes it a staple in the pantry of millions of American households. The domestic cereal market is dominated by the two largest players, General Mills, Inc. (NYSE:GIS) and Kellogg Company (NYSE:K), both owning around 30% of the ready-to-eat cereal market.
General Mills is much more than just a cereal company, with well-known brands found in kitchens everywhere. There's baking products such as Bisquick, Betty Crocker, Gold Medal Flour and Pillsbury. Haagen-Dazs ice cream in the frozen section. Larabar, Cascadian Farm and Muir Glen in the organic/natural space. Fiber One and Nature Valley for those quick snack granola bars, and one of the most well known yogurt brands, Yoplait.
As a long-term investor, I want to stock my portfolio up with as many great companies as I can and buy shares at fair value or less. Identifying great companies is the easy part of that equation, but you make your money ensuring the value is right when you buy shares.
Let's examine some qualitative factors of General Mills and why I feel that it meets the high-quality standard, and then dig into whether the shares represent a value.