Two Valentine's Day Sweet and Steady Stocks: Hershey and Coke

The annual sweetheart celebration is coming this weekend so we thought it a good time to revisit sentiment for two sweet stocks for steady going.

The Hershey Company (HSY), one of the world's largest chocolate makers, is closing out some of its high-end lines but appears to be successfully pushing through price increases, a rarity in this market. The company just beat earnings consensus and upped guidance for the coming year. Apparently, chocoholics are going to buy sweets whatever the economic situation so Hershey appears to be a good defensive play, although forward valuation, at nearly 20 P/E, is quite rich. Piqqem Sentiment on The Hershey Company is moderately bullish with a target share price of roughly $38.50. Make mine a dark, please.

Another sweet stock is Coca-Cola (KO), the iconic softdrink maker that began rebounding in 2008. Coke shares bounced on February 12 after the company's sales slowed down less than analysts had forecast. Coke is also viewed as a defensive play but the company had been losing market share and mind share to Pepsico (PEP) for a number of years before a recent Renaissance. Piqqem Sentiment on Coke is strongly bullish with a sentiment target share price of over $50. That may sound a bit too sweet to be true but shares jumped 7% in a single day on Feb 12 so anything's possible at this point.

Comments

[Marcap:]

Unfortunately, I think Hershey is an extremely overpriced stock poised for a big tumble. With a share book value of a mere $1.40 per share, and virtually no inside shareholders, its current trading price of $36.54 is just not realistic.

Feb 13 09:02 AM

[Jake Berzon:]

I don't know about that, Alex. It's not like these stocks have a significant upside at this point. So, the point of owning them is to loose less? Might as well stay in cash, I guess...

Feb 13 11:16 AM

[Alex Salkever:]

You might be right but if chocolate prices crash (entirely possible) and other commodities prices stay low but they are able to maintain prices then a lot of upside appears that is not currently priced in. Chocolate production coming online right now is skyrocketing. Dairy prices have yet to return to previous levels. Sugar, likewise, has been seriously spiking. Regarding Coke, its not cheap but it's a remarkably stable business with a dividend yielding stock. If the S&P snaps back at all, it will carry KO up with it. :) Have a Coke and a smile!


On Feb 13 09:02 AM Marcap wrote:

> Unfortunately, I think Hershey is an extremely overpriced stock poised
> for a big tumble. With a share book value of a mere $1.40 per share,
> and virtually no inside shareholders, its current trading price of
> $36.54 is just not realistic.

Feb 13 05:17 PM