The Hershey Company (HSY): A Bull Case Theory

We came across a bullish thesis on The Hershey Company on Value investing subreddit by raytoei. In this article, we will summarize the bulls’ thesis on HSY. The Hershey Company's share was trading at $185.08 as of December 1st. HSY’s trailing and forward P/E were 27.67 and 27.70 respectively according to Yahoo Finance.

Hershey’s stock performance offers a personal case study in understanding the cadence of corporate turnarounds and the importance of timing. Author shares, after first buying shares in November 2023 at $189 and adding along the way, the position remains slightly negative nearly two years later. The experience reinforces the pattern seen across many high-quality businesses: meaningful turnarounds often take about three years—two years to stabilize operations and an additional year to correct course.

In Hershey’s case, the disruption was driven primarily by a sharp surge in cocoa prices, similar to Mondelez, creating temporary margin pressure that is now beginning to ease. Other companies face longer cycles; Disney’s challenges, which began pre-COVID, weren’t properly addressed until Bob Iger returned in late 2022 and began restructuring through 2023, a multi-year reset that may culminate only when he hands over leadership in 2026.

The key insight is not whether turnarounds in strong companies succeed, but when to enter them. Buying too early in Hershey—before the market fully absorbed the cocoa shock—turned capital into “dead money,” while waiting 18 months after the initial issues could have meant entering at around $165 in June 2025 with immediate upside.

Position sizing also matters; adding too few but too large tranches while the stock continued to fall compounded the timing issue. Despite these lessons, the investment remains fundamentally intact. With cocoa pressures easing and the business regaining footing, the position is approaching breakeven, and staying patient now appears the sensible path as the longer-term recovery continues to unfold.

Previously we covered a bullish thesis on The Hershey Company (HSY) by Cautious-Garlic1992 in January 2025, which highlighted the company’s strong market share, pricing power, margins, and long-term growth potential. The company's stock price has appreciated approximately by 19.16% since our coverage. This is because the thesis largely played out. The thesis still stands as fundamentals remain resilient. raytoei shares a similar view but emphasizes turnaround timing and entry discipline.

The Hershey Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held HSY at the end of the second quarter which was 40 in the previous quarter. While we acknowledge the potential of HSY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.