Investing

CEO's General Mills Stake Shrinks by Half

Trey Thoelcke

Published: February 25, 2024 10:45 am

Investors can learn much by paying attention to the behavior of corporate insiders when it comes to positions in their own companies. People may part with shares for various reasons (such as buying a house, paying for college, or preparing for retirement). They generally buy for only one reason: they expect to make more money.

Often, one of the largest and best-informed shareholders in any company is the chief executive officer. Let’s see whether General Mills Inc. (NYSE: GIS) CEO Jeffrey Harmening has been increasing or decreasing his share count over the past year and whether he knows something we don’t.

What You Need to Know About General Mills

Source: pamela_d_mcadams / iStock via Getty Images

General Mills manufactures and markets branded consumer foods worldwide. The company offers grain, ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream and frozen desserts, nutrition bars, and savory snacks. Offerings include various organic products, including frozen and shelf-stable vegetables. It also manufactures and markets pet food products, including dog and cat food.

The company markets its products under many trademarks, including Betty Crocker, Bisquick, Bugles, Cheerios, Chex, Cocoa Puffs, Fiber One, Fruit Roll-Ups, Go-Gurt, Gold Medal, Golden Grahams, Häagen-Dazs, Lucky Charms, Nature Valley, Old El Paso, Pillsbury, Progresso, Trix, Wheaties, Green Giant, and Yoplait. (These are the 25 biggest product flops of the past decade.)

It sells its products directly, as well as through broker and distribution arrangements, to grocery stores, mass merchandisers, membership stores, natural food chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores, as well as drug, dollar, and discount chains. In addition, the company operates ice cream parlors.

General Mills was founded in 1866 and is headquartered in Minneapolis, Minnesota. That is also the home of Target Corp. (NYSE: TGT) and U.S. Bancorp. (NYSE: USB). Competitors of General Mills include Campbell Soup Co. (NYSE: CPB), Kellanova (NYSE: K), Kraft Heinz Co. (NASDAQ: KHC), and W.K. Kellogg Co. (NYSE: KLG). Harmening has been CEO of General Mills since 2017, and he is also the board chair.

The company posted over $20.2 billion in revenue and has a market capitalization near $36.4 billion. The stock is down around 20.0% from a year ago and trading much closer to its 52-week low than its 52-week high. The S&P 500 is more than 26% higher in the past year. General Mills shares are down almost 2% year to date.

How the CEO of General Mills Is Trading

Source: Bet_Noire / Getty Images

A year ago, Harmening owned about 470,300 shares, worth over $36.0 million. On last look, he owned less than 245,000 shares, a decline of over 225,600 shares. Meanwhile, the value of the stake shrank by around 56.0% to almost $15.8 million as the share price decreased.

The packaged foods giant shuffled some of its executives around in December, and one top executive retired recently. However, CEO Jeffrey Harmening could have sold shares for a variety of reasons, and we may never know the truth. Earnings have been better than expected in the past few quarters, and the company has not cut its dividend for more than decade, despite being in an industry facing headwinds. However, the consensus price target suggests there is less than 6% upside potential for the stock in the next 12 months, and analysts on average recommend holding shares.

Another internal shareholder to watch is Director Stephen Odland. His stake was worth about $11.2 million on last look. Group President Shawn O’Grady has a stake worth a little over $10.1 million. Note that Harmening and another group president sold some shares last month.