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Strategies & Market Trends : Value Investing

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To: Harshu Vyas who wrote (76547)	11/16/2024 9:10:26 AM
From: Paul Senior	Read Replies (1) of 78680

HSY is a reversion-to-mean stock for me, and yes, I have established a tracking position in it and am adding to it as stock falls. The business is stable, slow growing, not likely to be obsoleted. HSY is controlled by the Hershey Trust, so no activist investors likely here. P/e about 20 is under 10-year median of about 25. (Thus the revision idea) 1. I don't view it as a value stock. P/e high, margins not high enough. 2. The upside to this stock is small (say the analysts); the % gain from current share price (including the small div. yield) doesn't or shouldn't really appeal to investors/speculators, I'll guess. I'm involved with a number of reversion-to-mean stock ideas, and I have no problem also including a small bet here on HSY too. I don't see an opportunity risk for me here, because I have a large cash balance available for anything compelling that comes my way. 3. Grommit is right though, imo. Better stock plays for you/others are elsewhere.

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