Hershey destroys the analysts in Q2

As mentioned in the press release, the company really wanted to ensure a proper strategic position when it came to the core brands. Management significantly increased advertising expenditures to accomplish this goal. When it comes to consumer-products companies that are based on brand equity, I always want to see strong levels of marketing and promotions. I think Hershey made a wise choice in strengthening its advertising programs, and I believe the company should continue investments in this area. This is especially true during a recession. Money might be tight, but reminding consumers about the value of a particular portfolio through repeated brand exposure is nevertheless a worthwhile way to defend shareholder value.

I think Hershey had a good Q2, and I hope its next quarter is equally as effective, but I'm not inclined to buy the stock today. I don't think it would make a great trade quite frankly. However, if you already hold shares of Hershey, I don't see any reason why you can't still hold them. You certainly wouldn't sell on this earnings news.

Disclosure: I don't own any company mentioned; positions can change without notice.