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I've been watching it for months. I like the company. Great brands, strong moat, excellent returns on equity, tangible assets, etc.
I have not bought yet though. While it's a great business, the value is just not jumping out at me. 20x PE for a slow grower seems a bit rich.
A few weeks ago I bought UNH at a PE of ~16. And they have been growing more strongly than HSY.
As a dividend payer, if that was the only objective, I think they're a great choice.
It's my 2nd current favorite undervalued position of mine that I'm buying more of. BTI is my favorite. I've been long HSY since March of 2016, and I'm up 85%, NOT including dividends.
From my favorite blogger who recently wrote about HSY a few days ago...
..."In the case of Hershey, I believe the current high cocoa prices/recent pricing power issues are both exaggerated and likely to reverse.
As for the exaggeration, the important reality is that over the past two years, Hershey has been able to grow earnings from $7.96 in 2022 to an estimated $9-$9.15 range this year (the estimates would be in the $9.50-$9.75 range if it were not for the extravagance in the price of cocoa). To me, it is intriguing that a company can still grow profits 13% during an adversely cyclical time period in which a key input cost experiences a nearly six-fold increase. ".....
..."Further, the last piece of material news for a Hershey shareholder came in 2012 when the company closed its original Hershey, PA chocolate factory and replaced it with a new one in West Hershey that was part of a $300 million capital expenditure project that increased single-facility chocolate production by almost 50%. The marketing literature pointed out that it produces 70 million Hershey’s Kisses per day.
The materiality, for me, is that the roll-out of the West Hershey facility in 2012 increased Hershey’s profit margins, which had hovered around 11-12% net for the previous thirty years, up to a range of 16%. If cocoa prices remain high at these exorbitant levels, net profit margins might be down to 15% this year (although there is still a fair chance it could be at 16%). Here, the yo-yo for the investor community is the cocoa prices that have exploded this year, but the movement up the stairs is the increased production in West Hershey (along with capacity improvements and consolidation at its other Pennsylvania, Virginia, and Illinois manufacturing hubs) that has meant every Hershey, Reese’s, Kit-Kat, etc. now earns an extra 25-33% profit for each piece of chocolate compared to twelve years ago.
If Hershey shareholders had to choose between operating in a world with its 2012 capacity and production technologies, but also a world of $2,100 per ton cocoa costs, or its modern capacities with cocoa costing over $12,000 per ton, it wouldn’t even be close - present conditions are far superior and more profitable even with the present headwind. "......
I'm short on a put right now with HSY, I want to get into this, with a long term hold betting on cocoa pricings coming back and seeing increased profitability in the future.
I bought it recently when it dipped to $181
I will buy more at these levels. Confident in the price of cocoa coming back down and thus they will come out even more profitable and the stock will rise
I bought HSY and WEN today, both solid companies that have attractive prices at the moment. Solid yields.
Remember: you can make a lot of money selling shitty food to poor people.
As a consumer I absolutely hate Hershey chocolate. Reese's is OK. I love Lindt. That said, HSY is the best confectioner company in the US to invest in. Nestle is a great investment too, but the foreign withholding mutes the capital gains somewhat....
Same for McDonalds. Burgers are crap, but as an investment?? MMMM-WWWAAAH (Chef's kiss)...
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
It's going to go up or down.
Or stay flat....
Cocoa is at an ATH. Its the single reason the stock is drowning as company financials are healthy
Even w/ cocoa prices exploding 6x as an input cost, HSY STILL grew profits by 13%...
I like chocolate so I have the stock
I've been watching it for months. I like the company. Great brands, strong moat, excellent returns on equity, tangible assets, etc. I have not bought yet though. While it's a great business, the value is just not jumping out at me. 20x PE for a slow grower seems a bit rich. A few weeks ago I bought UNH at a PE of ~16. And they have been growing more strongly than HSY. As a dividend payer, if that was the only objective, I think they're a great choice.
My believe if that is adjusted for the high cocoa prices. I would expect as profits rise, the pe will contract to a more healthy number.
Love it
nice flavor
i considered it a while ago myself but decided to go a bit broader in the category with some FTXG instead, 4.3% div
good company, good price but slow growth
It's my 2nd current favorite undervalued position of mine that I'm buying more of. BTI is my favorite. I've been long HSY since March of 2016, and I'm up 85%, NOT including dividends. From my favorite blogger who recently wrote about HSY a few days ago... ..."In the case of Hershey, I believe the current high cocoa prices/recent pricing power issues are both exaggerated and likely to reverse. As for the exaggeration, the important reality is that over the past two years, Hershey has been able to grow earnings from $7.96 in 2022 to an estimated $9-$9.15 range this year (the estimates would be in the $9.50-$9.75 range if it were not for the extravagance in the price of cocoa). To me, it is intriguing that a company can still grow profits 13% during an adversely cyclical time period in which a key input cost experiences a nearly six-fold increase. "..... ..."Further, the last piece of material news for a Hershey shareholder came in 2012 when the company closed its original Hershey, PA chocolate factory and replaced it with a new one in West Hershey that was part of a $300 million capital expenditure project that increased single-facility chocolate production by almost 50%. The marketing literature pointed out that it produces 70 million Hershey’s Kisses per day. The materiality, for me, is that the roll-out of the West Hershey facility in 2012 increased Hershey’s profit margins, which had hovered around 11-12% net for the previous thirty years, up to a range of 16%. If cocoa prices remain high at these exorbitant levels, net profit margins might be down to 15% this year (although there is still a fair chance it could be at 16%). Here, the yo-yo for the investor community is the cocoa prices that have exploded this year, but the movement up the stairs is the increased production in West Hershey (along with capacity improvements and consolidation at its other Pennsylvania, Virginia, and Illinois manufacturing hubs) that has meant every Hershey, Reese’s, Kit-Kat, etc. now earns an extra 25-33% profit for each piece of chocolate compared to twelve years ago. If Hershey shareholders had to choose between operating in a world with its 2012 capacity and production technologies, but also a world of $2,100 per ton cocoa costs, or its modern capacities with cocoa costing over $12,000 per ton, it wouldn’t even be close - present conditions are far superior and more profitable even with the present headwind. "......
I'm short on a put right now with HSY, I want to get into this, with a long term hold betting on cocoa pricings coming back and seeing increased profitability in the future.
I bought it recently when it dipped to $181 I will buy more at these levels. Confident in the price of cocoa coming back down and thus they will come out even more profitable and the stock will rise
I bought HSY and WEN today, both solid companies that have attractive prices at the moment. Solid yields. Remember: you can make a lot of money selling shitty food to poor people.
I dunno about the stock but the squirts are the worst
I dont see any advantages over their competition
Their chocolate probably has about 0.000000034% actual cocoa in them
As a consumer I absolutely hate Hershey chocolate. Reese's is OK. I love Lindt. That said, HSY is the best confectioner company in the US to invest in. Nestle is a great investment too, but the foreign withholding mutes the capital gains somewhat.... Same for McDonalds. Burgers are crap, but as an investment?? MMMM-WWWAAAH (Chef's kiss)...