HSY - Long term opportunity
Updated
I tend to focus on technical plays. I like Hershey here, but more so for fundamental reasons.
Management's recent earnings forecast is solid; management also tends to be conservative in estimates.
The company certainly faces headwinds that shouldn't be ignored - continued inflation, the attention weight loss drugs are getting, and cocoa prices are at multi-decade highs.
Current PE is 19.64 while the historical PE ratio over the last five years is 24.75. That's 26% above where it currently stands. There may be some further downside, but I think ultimately much of the risk is priced into the stock.
HSY pays a dividend, but I don't see the yield at 2.6% as very material.
Alas, even on long-term buys, I focus on technical indicators to support the timing of entry. In this case, we have a stock at a 24-month low sitting at strong support. The MACD is showing positive divergence, as well.
I plan to play this by writing aggressive near the money puts in the volume shelf. Should I take ownership, I'll write covered calls.
Not a recommendation.
Management's recent earnings forecast is solid; management also tends to be conservative in estimates.
The company certainly faces headwinds that shouldn't be ignored - continued inflation, the attention weight loss drugs are getting, and cocoa prices are at multi-decade highs.
Current PE is 19.64 while the historical PE ratio over the last five years is 24.75. That's 26% above where it currently stands. There may be some further downside, but I think ultimately much of the risk is priced into the stock.
HSY pays a dividend, but I don't see the yield at 2.6% as very material.
Alas, even on long-term buys, I focus on technical indicators to support the timing of entry. In this case, we have a stock at a 24-month low sitting at strong support. The MACD is showing positive divergence, as well.
I plan to play this by writing aggressive near the money puts in the volume shelf. Should I take ownership, I'll write covered calls.
Not a recommendation.
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