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BEHIND THE MONEY: As '09 Markets Slide, Traders Go Cuckoo For Cocoa Bucks

In the middle of yet another year, week, day when it seems as if nothing is working, the chocolate trade is rewarding investors in a desperate search for some edible alpha.

The always astute Karen Finerman, President of Metropolitan Capital Advisors, pointed out to me on our morning conference call that cocoa futures have surged to a 23-year high on dwindling supply concerns.

On top of that, on a day when every stock in the Dow Average is down, shares
of Hershey are up a tasty 2% and are now nearly in the black for the year. Hershey is moving higher after a Citigroup analyst upgraded the shares to "buy" from "hold."

"Our analysis of recent takeaway trends at retail suggest significant improvement happening at Hershey's driven by significant increases in advertising spending and consumer trade-down to less expensive chocolate," wrote analyst David Driscoll, in a note to clients this morning.

But before you go dipping into all things choclate like an endowment manager on a sugar high, note that it would seem to me that one of these trends needs to end. Either cocoa needs to top out or higher costs will start to hurt Hershey's bottom line. We'll be following it closely on Fast.

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