Post #531 by DTB on the Falling Knives board

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Don't you often say most companies will eventually trade for 12 or 15 times earnings? Why would Hershey be any different in your view?

Yes, Hershey has traditionally traded at a high multiple of earnings, around 30, and two years ago, shares were worth up to $250, which was over 30 times earnings. Jim's warning has come true, and Hershey now trades for about 17 times earnings, not because revenue or earnings are depressed (they are up substantially over the last few years) but because the multiple has finally come back down to earth.

It would be a good fit for Berkshire, solid earnings with very little risk of major changes (sorry RFK), and providing for an adequate return if it leveraged by float, but for you and me, it may be a stay wealthy stock, not a get wealthy one.

dtb

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