The Hershey Company stock looks like a good swing long entry on rising large players volume as cocoa prices are plunging. TheStreet reports that Bernstein analyst Alexia Howard estimates a further 30% fall in cocoa prices could boost Hershey’s earnings per share by 8.6%.
I bought some Hershey stock in my personal trading account today.
The Hershey Company Stock
The relative strength of Hershey stock is great. August has been a bad month for stocks but Hershey is clearly bucking that trend.
The Effective Volume study shows that large players are really buying Hershey stock. The positive divergence of large players volume to the price of the stock is amazing. My GST Positive Divergence screener that I created for you is how I found this positive divergence. Here is the stock trading lesson on finding positive divergences on large players volume. Please make sure you review this lesson.
The Twiggs Money Flow is positive and rising which confirms The Hershey Company stock is being accumulated at this level.
The Hershey Company Stock Review
HSY's Return On Asserts of 12.51% is among the best of the industry. HSY does better than the industry average Return On Assets of 8.90%. HSY's Return On Equity of 77.34% is among the best of the industry. HSY does better than the industry average Return On Equity of 16.17%.
The Forward Price/Earnings Ratio of 22.35 indicates a rather expensive valuation of HSY. With a Price/Earnings Ratio of 34.29, HSY can be considered very expensive at the moment. Compared to an average industry Price/Earning Ratio of 33.67, HSY is valued more expensive than its industry peers. On top of this 80% of the companies listed in the same industry are cheaper than HSY. The high PEG Ratio, which compensates the Price/Earnings for growth, indicates HSY does not grow enough to justify the current Price/Earnings ratio. With a price book ratio of 26.20, HSY is expensive. Compared to an average industry price book ratio of 3.25, HSY is valuated more expensive than its industry peers. 100% of the companies listed in the same industry are a better valuation.
The EPS growth is accelerating: in the next 2 years the growth will be better than in the last year. HSY shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.27%. Measured over the past 5 years, HSY shows a small growth in Earnings Per Share. The EPS has been growing by 1.60% on average per year. Based on estimates for the next 2 years, HSY will show a small growth in Earnings Per Share. The EPS will grow by 8.07% on average per year. Measured over the past 5 years, HSY shows a small growth in Revenue. The Revenue has been growing by 2.50% on average per year.
An Altman-Z score of 6.62 indicates that HSY is not in any danger for bankruptcy at the moment. A Current Ratio of 1.10 indicates that HSY should not have too much problems paying its short term obligations. HSY has a Altman-Z score comparable to the industry average, which is at 6.51. When comparing the Current Ratio of HSY to the average industry Current Ratio of 1.84, HSY is less able to pay its short term obligations than its industry peers. HSY has a Quick Ratio of 1.10. This is a bad value and indicates that HSY is not financially healthy enough. Compared to an average industry Quick Ratio of 1.23, HSY is worse placed to pay its short term obligations than its industry peers. 80% of its industry peers have a better Quick Ratio. HSY has one of the worst Debt to Equity ratios in its industry.