Does anyone have thoughts on HSY? Seems reasonably priced

I had a position for a long time and, rather unlike my usual style, I saw it was flat for absolute ages and just threw in the towel and gave up. There are other fish in the sea.

In the before times, earnings were extremely steady and grew at a pleasant pace in real terms with great regularity. This earned them a premium multiple.

Roughly speaking (and only partly because of the spike in cocoa prices given what a small percentage of their expenses it represents) they had 4 years of no progress in net earnings, even though sales per share have continued to rise at nominal ~8%/year. This earnings flat spot caused the market to stop giving them the benefit of the doubt, and multiples have entered a new lower regime. The normal multiple used to be in the low 20s, and is now (and perhaps will remain) in the high teens.

Optimist's view: the one time drop in valuation multiples is done, and the newer lower level offers a better margin of safety. Still a great firm. A "coffee can" stock.

The pessimist's view: the outlook for the cacao production industry is not great, so that won't be a tail wind. And branded consumer products in general don't command the premium that they once did, to the extent that their premium is going negative. There are better picks out there. And they continue to have no traction at all outside the US.

Still, I think it pretty certain you could buy today at $160, collect 3.5% dividend while you wait, and sell at a price in the $200-250 range after a while. You never know how long that would take, but I suspect it would be soon enough the annualized return would be pleasant, if not outstanding, and pretty safe. It's not a wannabe neocloud operator trading on vapour.

Jim