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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • HSY, $HSY, The Hershey Co. Ranked at Top of Food Industry Stocks by ValuEngine 0 comments
    Nov 24, 2010 1:10 PM | about stocks: HSY
    Go to ValuEngine.com
    November 24, 2010
    ATTENTION Advanced Investors and Finance Professionals:
    If you are reading this you should download ValuEngine Institutional Software to see how VE’s powerful quantitative tools can increase your productivity and effectiveness.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

    Big Kiss

    HSY, $HSY, The Hershey Co. Ranked at Top of Food Industry Stocks by ValuEngine

       In honor of the US Thanksgiving holiday we did a screen for food-related companies with our ValuEngine Institutional software (Pending:VEI).  We filtered our results using simple liquidity criteria of share price > $3.00 and average volume > 100k shares/day.  When we looked at the stocks by composites score--which is made up of valuation, p/e ratio, market cap, 1- month forecast return, and LTM return (momentum)--the leader of the pack was Hershey Company (NYSE:HSY).

     Hershey is a leading snack food company and the largest North American manufacturer of  chocolate and non-chocolate confectionery products. Hershey markets such well-known brands as Hershey's, Reese's, Hershey's Kisses, Kit Kat, Almond Joy, Mounds, York, Jolly Rancher, Twizzlers, and Ice Breakers as well as new products such as Swoops and Hershey's S'mores. Hershey also offers a variety of snack products to consumers, including Hershey's Cookies, Mauna Loa macadamia nuts, and Hershey's Snack Barz.

      ValuEngine has issued a BUY recommendation for The Hershey Company. Based on the information we have gathered and our resulting research, we feel that The Hershey Company has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE volatility, company size and market valuation.

      Based on available data as of Nov. 24, 2010, we believe that HSY should be trading at $54.93. This makes HSY 14.98% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For HSY, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $2.56, forecasted EPS for the next four quarters of $2.71, and correlations to the 30- year Treasury bond yield of 3.92%.

      However, all may not be sweet for this stock.  As commodity investors know, there have been some real shenanigans going on with cocoa lately.  Prices are high for this important raw material and if current trends prevail, world consumption of chocolate will outpace the supply of cocoa.  High prices for chocolate's critical ingredient may severely impact big producers like Hershey.

      Subscribers can check out the latest figures on The Hershey Company from our models HERE.

    Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

     

    Market Indices Data
      Latest Change YTD
    Dow Jones
    11,173.40 137.06 7.15%
    NASDAQ Composite
    2,542.67 47.72 12.05%
    Russell 2000
    735.01 15.08 15.92%
    S&P 500
    1,196.68 15.95 7.32%

     

    ValuEngine Market Overview
    Summary of VE Stock Universe
    Stocks Undervalued
    52.76%
    Stocks Overvalued
    47.24%
    Stocks Undervalued by 20%
    24.33%
    Stocks Overvalued by 20%
    18.45%

     

    ValuEngine Sector Overview
    Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
    Basic Materials -1.64% 2.99% 22.97% 14.77% overvalued 56.68% 33.50
    Oils-Energy -1.47% 4.63% 11.27% 12.32% overvalued 40.24% 42.50
    Multi-Sector Conglomerates -1.60% 1.37% 17.13% 4.29% overvalued 27.84% 32.23
    Auto-Tires-Trucks -2.32% 1.92% 39.73% 1.13% overvalued 43.96% 33.91
    Transportation -1.57% 0.06% 18.10% 0.67% overvalued 25.36% 39.20
    Retail-Wholesale -0.81% 3.54% 15.29% 0.54% overvalued 47.59% 25.57
    Utilities -1.07% -0.04% 4.46% 0.37% undervalued 15.43% 27.09
    Finance -1.32% -0.67% 12.34% 0.42% undervalued 16.60% 29.35
    Industrial Products -1.40% 1.86% 14.92% 0.70% undervalued 24.94% 26.87
    Consumer Staples -1.43% 1.93% 6.53% 1.35% undervalued 15.05% 21.68
    Aerospace -0.09% -0.79% 16.37% 2.75% undervalued 25.57% 19.02
    Computer and Technology -1.11% 1.68% 21.72% 3.11% undervalued 29.63% 39.89
    Business Services -1.20% 2.00% 6.86% 4.26% undervalued 17.21% 28.99
    Consumer Discretionary -1.03% 1.87% 17.35% 4.36% undervalued 24.39% 30.21
    Construction -1.52% 1.99% 0.66% 10.48% undervalued 2.87% 37.34
    Medical -1.02% 1.38% 10.29% 11.31% undervalued 15.74% 33.27

     

     
     
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    Disclosure: no positions
    Stocks: HSY
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