Steady-as-she-goes, to cite an old Star Trek phrase, regarding The Hershey Company (NYSE: HSY), which is why I'm reiterating my Buy rating for the company, first recommended on April 23, 2009 at a price of $37.45.
Manufacturing savings, new products, and promising opportunities for revenue growth in international markets, along with demonstrated marketing prowess, point to a bright future for HSY. The company's dual-class capital structure with unequal voting rights is problematic, but not enough to change the overall investment evaluation.
More-cautious investors should wait for HSY to close above $40 for three consecutive days. The First Call FY2009/FY2010 EPS estimates for HSY are $2.08 to $2.23.
Stock Analysis: Hershey is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in HSY now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your HSY position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $26.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
8-19-2009 @ 9:39PM
Joe Mosley said...
When Hershey closed their plant in Pennsylvania and moved it to Mexico, they lost me. If Hershey wants to make their product in Mexico, they can sell it in Mexico.
8-20-2009 @ 9:25AM
Dan B said...
aGREED, they are the great Mexican chocolate bar
8-20-2009 @ 10:25AM
Tom Barlow said...
Here's a company that could use a bailout; free Hershey bars for everyone!
8-29-2009 @ 1:01PM
J. Laubach said...
I hate to tell those who think Hershey moved to Mexico are wrong, but 90% of American sold Hershey products are still manufactured in Pennsylvania and Virginia.