(By Horacio Marquez) We have been raking in huge profits in all our cyclical and aggressive plays since we called the turnaround in Brazil last October 27: Petroleo Brasileiro (NYSE: PBR) — known as Petrobras – Vale (NYSE: VALE), Apple Inc. (Nasdaq: AAPL), BHP Billiton Ltd. (NYSE: BHP), Research in Motion Ltd. (Nasdaq: RIMM), IBM (NYSE: IBM), Amazon.com Inc. (Nasdaq: AMZN), Diamond Offshore Drilling Inc. (NYSE: DO), and Ciena Corp. (Nasdaq: CIEN) have all done splendid. And over the longer term, all of these companies are going to continue delivering, with some obvious profit-taking bouts along the way.
One of such profit-taking episode could be starting right now. And it could be driven by Standard & Poor’s recent downgrade of United Kingdom’s sovereign debt rating. This was in turn followed by the comments coming out from PIMCO that suggest the United States’ debt rating could be in jeopardy. Even though S&P minimized that possibility, when Bill Gross speaks, the bond markets listen.
At this point, it is good to look for the defensive plays that have been neglected in this upturn and for safe havens for investors taking profits from the recent run. After looking long and hard, I came to General Mills Inc. (NYSE: GIS).
General Mills met earnings expectations in March and raised its earnings outlook. It has been benefiting from the drop in commodities prices, especially agricultural. In addition, the firm, like many in the consumer business, has suffered from a strong U.S.
