Mad Money

Don't miss Hershey's sweet deal

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America's largest chocolatemaker is facing a sticky situation with analysts this week. Last Friday, Hershey was a hit with its second downgrade of the week, causing the stock to pull back. It was also upgraded twice in one week, leaving Jim Cramer perplexed.

Could this be a good time for a sweet opportunity on Hershey?

Both Wells Fargo and Goldman Sachs upgraded Hershey, then last Wednesday JPMorgan downgraded it to neutral and Deutsche Bank brought it to a hold from a buy. That's two upgrades and two downgrades, in roughly a week!

"This kind of analyst face-off is actually a good thing because it helps us clarify the bullish and bearish positions on Hershey, so that we can do a better job of figuring out where we stand on the stock," the "Mad Money" host added.

Who could turn down Hershey Kisses, Reese's peanut butter cups and Twizzlers?

The only way for Cramer to produce a fair analysis on how to advise investors, is to examine the case of both the bulls and the bears. This is especially important, as the company reports on Thursday.

JPMorgan's main reason for the downgrade is that in their perspective, the stock has already run too much. They think it is now fairly valued and has limited room for upside. They noted that Hershey has been the best performer in the packaged food group, suggesting that it might be time to cash in.

Deutsche Bank released a piece entitled "Valuation Too Sweet…Downgrading To Hold," sharing many of the same views as JPMorgan. Additionally, Deutsche noted that declining commodity costs might not represent as big as an issue as initially thought.

The biggest roadblock could be the rise of cocoa and almond costs, along with the price of sugar, which has risen 10 percent since the beginning of the year.

The last worry by the bears is the fear that high-end chocolate is becoming more prevalent in the U.S., and Hershey just doesn't have the exposure it needs to compete in that segment of the market.

As for the bulls, Goldman pointed out that with the strength of the U.S. economy, companies like Hershey benefit from the low cost of oil for both fuel and packaging.

Wells Fargo analysts cited that they are expecting a huge explosion on Hershey's gross margin. Back in July, Hershey raised prices by 8 percent. In the months following, milk powder dropped by 40 percent, international price of sugar went down 13 percent, and of course oil has played a major role.

Hershey could soon be rolling in cash when those margins pile up.

Additionally, the analysts at Wells suggested that Hershey could have the opportunity for smart acquisitions in the U.S. Just as Hershey's acquisition of Brookside in 2011 proved to be successful, there could be 20 other Brookside-like companies lingering in the chocolate confectionery space to gobble up.

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"The stock has run, and it's not exactly cheap. I recommend putting half of your position before Hershey reports next week, and then if for some reason it sells off after the quarter, you can use that weakness to buy some more," said Cramer.

The "Mad Money" host anticipates good news when Hershey reports, and Cramer wants investors to take advantage of this window of opportunity by getting in on the Hershey sweet spot.

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