Company Overview - The Hershey Company (NYSE: HSY) is a world-renowned chocolate maker known for iconic products like Hershey Kisses and Reese's [1] Performance Analysis - The company has struggled immensely over the past year [1] - The S&P 500 (SP500) saw gains during the same period, indicating Hershey underperformed relative to the broader market [1] Investment Context - The author has a beneficial long position in shares of VOO, which includes Hershey's stock through the S&P 500 index ETF [2] - The article expresses the author's personal opinions and is not compensated by any company mentioned [2]

Core Insights - Michele Buck, the Chairman, President, and CEO of The Hershey Company, will retire on June 30, 2026, after serving for 20 years, with a transition plan in place for her successor [1][3][4] - A special committee has been formed to search for the next CEO, considering both internal and external candidates [2][3] - Hershey reaffirms its full-year 2024 financial outlook and plans to provide its 2025 outlook during the earnings release in February [3][4] Company Overview - The Hershey Company is a leading snacks company with over 20,000 employees globally, generating more than $11.2 billion in annual revenues from over 90 brand names in approximately 80 countries [4][5] - The company is recognized for its commitment to ethical and sustainable operations, with a focus on helping children succeed through equitable access to education [5]

Investment Strategy - The strategy emphasizes capital preservation and steadily growing income through a dividend-focused value approach [1] - The portfolio consists of high-quality value stocks that offer meaningful growth and long-term safety [1] Portfolio Holdings - The portfolio includes stocks such as HSY, MDLZ, MO, and BTAFF, with beneficial long positions through stock ownership, options, or other derivatives [2] - Potential initiation of a beneficial long position in Mondelēz International, Inc through stock purchase or sale of cash-secured put options within the next 72 hours [3]

The Hershey Company (HSY) appears to be trading at a premium, with its price-to-earnings (P/E) ratio higher than both the Zacks Food – Confectionery industry and the broader Consumer Staples sector. Hershey’s forward 12-month P/E ratio stands at 20.16, surpassing the industry average of 17.26 and the sector average of 16.52. This elevated valuation has raised concerns among investors about whether the stock's current price is justified.Hershey’s high P/E ratio, coupled with its low Value Score of D, suggest ...

HERSHEY, Pa., Jan. 9, 2025 /PRNewswire/ -- The Hershey Company (NYSE: HSY) announced today that it will release its fourth-quarter sales and earnings results on Thursday, February 6, 2025, and hold a conference call with analysts at 8:30 a.m. ET on that date. The company will host the conference call via a live webcast on the Hershey corporate website.  Please click here and navigate to "CALENDAR OF EVENTS" for webcast details.If you are unable to click on the link above, please copy and paste the URL below ...

Shareholders in Hershey (HSY -1.99%) are hoping for sweeter days ahead following a frustrating 2024. Underwhelming sales by the confectioner have pressured the stock, which is down about 12% over the past year and currently near a 52-week low.Despite some bitter headline numbers, there are several reasons now could be a great time to pick up shares in a high-quality company that maintains solid fundamentals. Let's look at two of them.1. It's ready to move past temporary headwindsHershey, with its signature ...

Group 1 - Hershey's stock closed at $162.22, down 1.99% from the previous day, underperforming the S&P 500's gain of 0.16% [1] - The stock has decreased by 11.58% over the past month, compared to a 5.98% loss in the Consumer Staples sector and a 2.8% loss in the S&P 500 [1] Group 2 - The upcoming earnings report is expected to show an EPS of $2.38, a 17.82% increase year-over-year, with revenue anticipated at $2.86 billion, reflecting a 7.55% rise [2] - Recent analyst projections for Hershey are crucial, as positive revisions indicate a favorable outlook on the company's business health and profitability [3] Group 3 - The Zacks Rank system currently rates Hershey as 5 (Strong Sell), with the Zacks Consensus EPS estimate having decreased by 1.69% in the past month [5] - Hershey's Forward P/E ratio stands at 20.64, higher than the industry average of 20.02, indicating it is trading at a premium [6] - The company has a PEG ratio of 4.48, compared to the industry average of 3.75, suggesting a higher valuation relative to projected earnings growth [6] Group 4 - The Food - Confectionery industry, part of the Consumer Staples sector, has a Zacks Industry Rank of 242, placing it in the bottom 4% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Group 1 - The Hershey Company is a leading player in the confectionery industry, competing with major companies like Mars Inc. and Ferrero International S.A. [1] - Hershey's market position is strengthened by its long-standing reputation and extensive product offerings [1] Group 2 - The company is publicly traded on the NYSE under the ticker HSY [1] - Hershey's strategic focus includes dividend growth investing and value, appealing to long-term investors [1]

Stock Performance and Market Speculation - Hershey's stock experienced significant volatility in December, trading between $168 and $208 due to takeover speculation [1] - The stock price eventually settled after the speculation subsided [1] Investment Strategy and Background - The analyst focuses on long-term investing through low-risk ETFs and CEFs, with a macro perspective [1] - The analyst has nearly ten years of experience trading stocks and currencies and currently manages a family fund [1] - The analyst also invests in real estate and contributes to Matrixtrade as a freelance writer [1]

Hershey's Dividend Yield and Valuation - Hershey's current dividend yield of 3.2% is near its highest level ever, significantly higher than the S&P 500's 1.2% and the average consumer staples company's 2.5% [1] - The stock appears historically cheap, with a 38% price decline from its peak, making it an attractive investment opportunity [7] - Over the past decade, Hershey's revenue grew at an annualized rate of 4.5%, while earnings per share increased by nearly 10% annually [7] - Management has increased the dividend at an annualized rate of 10% over the past decade, appealing to dividend growth investors [8] Challenges Facing Hershey - Cocoa prices have risen sharply due to supply-demand imbalances, leading to higher cost of goods sold inflation expected in 2025 [2][3] - The company has hedged its cocoa exposure for 2024, but these hedges will eventually roll off, exposing it to future price volatility [2] - The popularity of new weight loss drugs, which suppress appetite and promote healthier eating, poses a long-term threat to Hershey's top line [4] - These challenges have contributed to a selling mood among investors [5] Potential Mitigating Factors - Hershey has a history of managing commodity price volatility and is likely to adjust by increasing prices [9] - The company believes cocoa prices will normalize, with a potential surplus expected in 2025, though the market dislocation may take time to resolve [9] - The long-term impact of weight loss drugs may be limited, as studies show only about 50% of people adhere to long-term medication regimens [10] - Early-stage adverse effects of weight loss drugs, such as muscle loss, could limit their widespread adoption [11] Investment Opportunity - The current market sentiment presents a buying opportunity for long-term investors, as Hershey's challenges may be temporary and less severe than feared [12][13] - The company's strong historical performance and attractive dividend yield make it a compelling choice for dividend growth investors [13]