Protect Your Portfolio With Tootsie Rolls

Core Viewpoint - Tootsie Roll Industries (NYSE: TR) is positioned as a defensive investment with a strong historical performance during market downturns, making it an attractive option amid potential market volatility [3][10][22]. Financial Performance - Tootsie Roll has shown a total return of 36.94% compared to the S&P 500's -15.19% over a specified period, indicating its resilience during market declines [4]. - The company's current price-to-earnings (P/E) ratio is approximately 23x, and its price-to-sales (P/S) ratio is around 2.8x, both of which are at the lower end of their historical ranges [14][23]. - Tootsie Roll's dividend yield stands at 1.15%, which is competitive compared to the S&P 500 ETF's yield of 1.26% [8][13]. Market Position and Valuation - Tootsie Roll's market capitalization is approximately $2.15 billion, with enterprise valuations on core EBITDA cash generation at 14.6x and sales at 2.6x, suggesting it is undervalued compared to larger competitors like Hershey and Nestlé [16][24]. - The company maintains a conservative balance sheet with net financial debt of -$150 million, contrasting sharply with Hershey's $4.8 billion and Nestlé's $59 billion in net debt [18][25]. Technical Analysis - Recent technical momentum indicates a potential upside breakout for Tootsie Roll, supported by positive indicators such as the Accumulation/Distribution Line and Chaikin Money Flow [20][21]. - A double bottom pattern may have formed over the past year, suggesting a bullish trend could be emerging [20]. Investment Thesis - Tootsie Roll is viewed as a strong defensive investment, particularly in light of potential market downturns, with a favorable valuation setup that could lead to significant outperformance [31][28].