kelloggs

[gtg657g]

I know wthat cramer was pushing general mills tonight and calling it best of breed...but I think Kelloggs looks to be the better company. They are the cheaper buy right now, does anyone else care to comment on the food play?

[deepinwonder]

GIS has a lower price to earnings than K does, but Kellogg was upgraded yesterday by two analysts and they are also in health food stores with the Morningstar Farms brand, as well as grocery stores. S&P gives K four stars, too.

I wondered why Cramer didn't mention that higher fuel costs would cut into the earnings of food companies, but saw one analyst did downgrade ten of them. K and GIS were not included in that list, for some reason. He said it was because those companies couldn't raise prices in the stores, but as a shopper, I know they do it all the time. And why wouldn't they be able to, if others can? That made no sense, he must be shorting them. ;)

Anyway, K looked good to me. Don't see what's wrong with it. Does Cramer have stock in General Mills?

[JimJeep]

He just bought some for his charity fund yesterday....he also dumped some 2 or 3 weeks ago. He can't make up his mind on this one.

[gtg657g]

deepinwonder...
gis does have a lower multiple but its growth outpaces k by almost 3x's, wouldn't that make k the cheaper buy?

[deepinwonder]

K has a growth rate of 9% with a PEG ratio of 2.08.

GIS has a growth rate of 8% and a PEG ratio of 1.9.

The PEG ratio is the P/E divided by the expected growth rate and the lower the number, the cheaper the stock, so today, GIS is cheaper. There is barely a difference. either way, so I think it's really about which company you think will do better, considering all the other factors and irons they have in the fire.

Generally, this cereal call doesn't interest me that much when there are higher growth companies around, but they are solid and that is one of the factors Cramer was looking for.

[gtg657g]

deepinwonder,
thanks for the clarification, I'm new to the game and your insight has helped me alot! :D

[deepinwonder]

Sure. :D