There was a moment in 2016 when Hershey stock was trading at $82 per share while earning $4.41 per share in profits for a valuation of 18.5x earnings. It was something that struck me as an example of “buying a wonderful company at a fair price”, and I purchased shares. The stock briefly rose to $113 per share for a rapid 37.8% increase. By June 2018, Hershey was down to $92, for a 12.2% gain.
Did that bother me in the slightest? No, because Hershey was growing its profits along the way. Profits per share in $4.41 (2016) had climbed to $4.76 (2017) then to $5.36 in 2018. The company was growing profits at a 10.25% compounded annual growth rate. It was moving along, doing what it has always done.
What I find noteworthy right now is that the stock has climbed from $105 in February to $138 now for … Read the rest of this article!