Consolidation in aisle four? I mean what else can you say about this motley crew of winners today other than there better be some takeovers or else Kraft Heinz (KHC) , General Mills (GIS) and Kellogg (K) are going to have a hard time staying up at these levels.
But one thing is for certain. These are all creatures of a lack of selling because none of these companies is doing well enough to deserve these valuations.
Consider General Mills. I recommended it at around these levels based on the humanization of pets theme when they bought Blue Buffalo. But it was clear that, after all the buybacks that they have done, they didn't have enough money to make this deal so they did that equity offering that was so depressing both to the stock and mentally.
Now you are three bucks up on the deal. Time to take profits? I think yes on half but let the rest run just in case that there might be fire where there is smoke.
Kellogg and Kraft Heinz are made for each other but it's been rumored for so long that I can't bite. But both stocks got oversold and when they stopped going down there were no more sellers at all. Hence the big gains.
In the meantime there are plenty of people who are looking for something, anything, to buy, and these stocks are so behind the market that buyers have no problem scooping things up.
I would say they are all sucker bets to buy, except I could have said that yesterday and nothing happened other than they caught bids while the sellers have disappeared.