By the Numbers

Will Hershey have a Sweet Valentine's?

Will Valentine's Day help Hershey?  According to the Discover Card survey 49% plan to buy their Valentine candy or chocolate, and 33% of women hope to receive chocolate for Valentine's Day.

Will a surge in sales for Valentine's Day help Hershey?  Hershey reported lower earnings on January 24th missing by a penny,  and broke a 14-year trend bullish short term trend due to higher energy and commodity costs.

Historically, from Jan, 1993 - Jan, 2006, Valentine's is a  good  time to buy Hershey stock for a short term hold (slightly more than 3 weeks).  It is up 100% of the time by an average move of 6% in that time period  (Q4 earnings report in Jan  - Valentine's Day) based on data from LIM and MarketEdge.

  • In 2007, Hershey was positive from the day it reported, 1/24/07 - 2/14/07, but only by a little more than 1%
  • In 2008, Hershey is down almost 12% YTD, and almost 4% over the last 30 days

Hershey has raised the wholesale price of its candy twice in the last year on rising costs of cocoa and milk and stating that it is more exposed to these price increases than competitors Mars and Nestle (NSRGY).

Cocoa is at near 5-year highs, and it is up nearly 15% in 2008 alone, and 44% over the last 12 months.  Sugar is up almost 11% in 2008, and is up over 15% over the last 12 months.

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