Summary
Food stocks have remained out of the limelight this year on account of soft growth rates.
Positive dynamics of chocolate confectionery and diversification into salty snacks market will favor Hershey.
Hershey’s new round of expansion in India is expected to yield even better results.
Despite sound fundamentals, Hershey is currently not a buy due to rich valuation.
Food stocks have remained out of the limelight this year as well, shedding almost 13% value YTD. That’s attributable to soft demand dynamics of the packaged food industry, increased intensity of competition among the players for market share retention, and elevated pressure on profit margins due to an uptrend in commodity and logistics costs. Consequently, many big names in the packaged food industry, including General Mills (GIS), Kellogg (K), and Kraft Heinz (KHC), have exhibited abysmal price decline so far this year.
Source: Yahoo Finance
