Question:
I’m looking at General Mills over ConAgra Foods. I’ve owned ConAgra since the beginning of the year, and it really doesn’t do much. I was thinking of switching over to General Mills. Thoughts?
Answer:
Currently we own both General Mills, Inc. (NYSE:GIS) and ConAgra Foods, Inc. (NYSE: CAG) in the Henssler Income portfolios, as they are both good dividend paying stocks. Both are good companies. We find General Mills a little more stable as it had more brands in the stores. Additionally, it is not connected to its brands through all channels, as ConAgra has more exposure to commodities. While ConAgra’s beta is only slightly higher than General Mill’s, we feel that the added commodity exposure will lead to more volatility in it than in shares of General Mills. Additionally, both companies have solid and comparable dividends. As you mentioned above, ConAgra has done very little in the time you have held it. We would prefer to hold General Mills over ConAgra; however, this would likely be a bit less volatile of a stock than ConAgra. We feel General Mills is a very well run company, and one we would consider.
Additionally, in the Consumer Staples sector, we currently own Church & Dwight Co., Inc. (NYSE: CHD), Archer Daniels Midland Company (NYSE: ADM), H.J. Heinz Company (NYSE: HNZ), and Diageo PLC ADR (NYSE: DEO), which is a spirits maker and distributor. We feel Diageo will be a good defensive play, as spirit makers tend to do well in times of economic uncertainty. We also own Kimberly Clark Corp. (NYSE: KMB).
Question:
I’ve owned O’Reilly Automotive since early 2011. Should I take some profits now? Late June’s movement didn’t look good.
Answer:
O’Reilly Automotive, Inc. (NASDAQ: ORLY) lowered its guidance for second quarter earnings, as did Advance Auto Parts, Inc. (NYSE: AAP), because the sector has been beaten up in the market. It is a good defensive sector, as the fleet of cars on the road age. During uncertain economic times, Americans are more apt to repair their own cars.
We prefer Advance Auto Parts, which we own, to O’Reilly. O’Reilly is expensive, trading at 19 times earnings. Their market is also saturated with stores. Advance Auto Parts has more opportunity for growth.
Overall, we like this industry and feel that the recent pull back in auto part retailers is a good time to buy or in your case, hold.
Question
I know TiVo is a relatively small company—probably one you don’t look at much— but I still wanted to see if you had an opinion on the company.
Answer:
TiVo Inc. (NASDAQ: TIVO) is a developer and provider of software and technology that enables the search, navigation, and access of content across sources, including linear television, on-demand television, and broadband video. Currently, they have several patent lawsuits ongoing, which have paid off for them in the past. While TiVo has a good subscriber base, there are more and more generic DVR companies coming to market, which may hurt them. The stock trades below $10 per share, which indicates a lack of institutional ownership. The company has also been operating at a loss. However, the company has nearly $4.70 in cash per share, so the company should be around for a while. We do not see an upside to the stock. We do not recommend buying, and if you own, we suggest selling.
At Henssler Financial we believe you should Live Ready, which includes understanding your investments. If you have questions regarding your holdings, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
