Kiss Hershey Goodbye

Nearly two years ago I recommended The Hershey Company (HSY) to Real Money Pro readers. That was when the shares were trading at $60, and over the past 23 months they have climbed more than 50% and shareholders received eight dividend payments totaling more than $3.23 per share. That dividend stream boosted shareholders' return to just over 59%.

There were several reasons for getting behind HSY shares at that time, including the seasonal nature of candy demand over the October-April period, a shift to what I called "guilty pleasure products" and on falling cocoa prices. Today, we are once again headed into the seasonally strong period of candy demand that starts with Halloween and culminates with Easter. Consumer discretionary spending is also being called into question following weaker savings and other data that point to stagnant wages, as well as a drop in average household income over the last few years. My view is that consumers will continue to buy what they need vs. what they want, which jibes with recent forecasts that call for weaker holiday spending this year compared to the last few. In that environment, consumers will continue to buy small guilty pleasures....256 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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