The Quantitative Grade looks at how well the stock performs relative to its risk. This is where being a boring stock really helps because General Mills' daily fluctuations tend to be quite mild in comparison to the market. This is very important because it tells me that General Mills isn't as risky as many other stocks. Also, when stocks have lower volatility, it often signals heavy buying from institutional investors. For all these reasons, the stock has a Quantitative Grade of A.

Now let's look at the Fundamental Grade. That grade is based on the average of eight different variables: sales growth, earnings growth, change in operating margins, earnings momentum, earnings surprises, analyst revisions, cash flow and return-on-equity. General Mills is clearly strong in these categories according to its most recent earnings report.

For the quarter ending on August 24, General Mills reported operating earnings of 96 cents a share, beating Wall Street's forecast of 87 cents a share by more than 10%. That explains its B grade for earnings surprises.

General Mills also raised its full-year earnings forecast to $3.81 to $3.85 per share from its earlier forecast of $3.78 to $3.83. This has led Wall Street analysts to revise their forecasts higher, so that explains the B grade for analyst revisions. (And as a side note, I have to say that I'm very impressed that General Mills has raised its earnings forecast so early in its fiscal year.)

The company's earnings growth for the quarter was 19% over last year while sales growth was 14%. Both numbers are decent and rated Cs in PortfolioGrader. However, you'll notice that earnings grew faster than sales, which means General Mills' margins are expanding. It's rated a B under operating margin expansion, which is very important because it signals that a company is gaining a stronghold on its market. They can charge more for their products and not lose market share. This is the Holy Grail to business!

You can see why I'm so enthusiastic about this company. Seeking companies with the strongest fundamentals is how I've managed to deliver market-beating profits consistently for my Blue Chip Growth subscribers, and General Mills is a perfect example of the type of stock I look for.

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Buy General Mills

I expect another strong earnings report from General Mills, so now is the time to buy while the stock is still a bargain!

The company won't report earnings again until a few days before Christmas, which means this is an excellent time to add shares. Another nice earnings surprise should result in a big jump for the stock and big profits for those who buy now. I currently rate General Mills an outstanding buy and have specific buy below pricing instructions for my Blue Chip Growth members.

General Mills is just one of many undervalued stocks that will soon emerge as market leaders. Louis Navellier's Blue Chip Growth Buy List currently carries over 40 stocks. There's no other list like this on Wall Street. If you sign up for Blue Chip Growth today, you can lock-in a risk-free one year subscription at 50% savings. Get started today!