This is a step-by-step stock review to answer the question, is Hershey (HSY) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Hershey (HSY) stock a good buy?
1.Hershey Company History
- Founded in 1894: Hershey was established by Milton S. Hershey in Derry Church, Pennsylvania, initially as the Hershey Chocolate Company.
- First Milk Chocolate Bar: In 1900, Hershey introduced its first milk chocolate bar, setting the stage for its future success.
- Public Listing: Hershey went public in 1927, trading on the NYSE under the ticker HSY, becoming a prominent player in the confectionery industry.
- Expansion: Over the decades, Hershey expanded its product line with iconic brands like Reese’s, Kit Kat, and Hershey’s Kisses, becoming a global leader in chocolate and candy.
- Global Presence: Hershey’s products are now available in over 60 countries, reflecting its widespread popularity and international reach.
- Acquisitions: The company has acquired several brands, such as Halo Top and Amplify Snack Brands, diversifying its portfolio beyond traditional chocolate.
- Sustainability Efforts: Hershey is committed to sustainable sourcing and reducing its environmental impact, focusing on responsible cocoa sourcing and eco-friendly practices.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 67
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Hershey makes money:
- Chocolate Sales: Hershey’s primary revenue comes from selling its popular chocolate products, including Hershey’s Bars, Reese’s, and Kit Kat.
- Confectionery Products: The company also earns money from a variety of candy and confectionery items, such as Hershey’s Kisses and Twizzlers.
- Snacks and Beverages: Revenue is generated from snacks and beverages, including non-chocolate items like pretzels and milkshakes.
- Licensing: Hershey makes money through licensing agreements for branded merchandise and partnerships with other companies.
- International Sales: They earn revenue from exporting their products to international markets, expanding their global reach.
Here are a few of the other companies that Hershey has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- H.B. Reese Candy Company
- Krave Jerky
- Amplify Snack Brands
- BarkThins
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Hershey stacks up against other companies.
- Tootsie Roll Industries, Inc.(TR) – 67
- The Hershey Company.(HSY) – 67
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Revenue Growth: Michele Buck Drove significant increases in Hershey’s revenue and overall financial performance.
- Product Innovation: Introduced successful new products and revamped existing ones to meet changing consumer preferences.
- Brand Strengthening: Enhanced Hershey’s brand presence and market position through effective marketing and branding strategies.
- International Expansion: Expanded Hershey’s reach into new international markets, increasing global sales.
- Sustainability Initiatives: Advanced sustainability efforts, including ethical sourcing of cocoa and reducing environmental impact.
- Operational Efficiency: Improved operational processes and efficiencies, contributing to cost savings and higher profitability.
- Digital Transformation: Implemented digital and e-commerce strategies to enhance customer engagement and sales channels.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Hershey (HSY) is 72/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Hershey (HSY) stock a good buy?
Some of the top questions investors can have is Hershey (HSY) stock a good buy or should I buy Hershey (HSY) stock?
Hershey is a solid investment choice for several compelling reasons. As a global leader in the confectionery industry, Hershey has a strong brand presence and a diverse product portfolio, which includes iconic chocolate and candy products. The company’s consistent revenue growth and robust financial performance highlight its market strength. Hershey’s effective marketing strategies and innovation in new product offerings help it adapt to changing consumer preferences and trends. Additionally, its focus on sustainability and ethical sourcing enhances its reputation and long-term viability. While the confectionery market can be competitive and subject to economic fluctuations, Hershey’s strong market position and proven track record make it a reliable investment for those seeking stability and growth in the consumer goods sector.
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To truly know if Hershey is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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