One of the standouts of today's afternoon trading session has been Hershey Company, which logged a -1.5% drop and underperformed the S&P 500 by -1.0%. The Confectioners stock is now trading at $191.44 per share and is -24.69% below its average target price of $254.2. Analysts have set target prices ranging from $227.0 to 300.0 dollars per share, and have given the stock an average rating of buy.
The market seems to share this rosy outlook, since Hershey Company has a short interest of only 2.1%. This represents the percentage of the share float that is being shorted, and each short position stands for an investor's expectation that the price of the stock will go down in the future.
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
Another way to gauge the sentiment on Hershey Company is to look at the percentage of institutions that are invested in the stock. In this case, 82.2% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
Overall, there is mixed market sentiment towards Hershey Company because of an analyst consensus of strong upside potential, a buy rating, an average amount of shares sold short, and a significant number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.
At a glance, here are some essential statistics you may want to know about HSY:
It has trailing 12 month earnings per share (EPS) of $8.69 per share
Hershey Company has a trailing 12 month Price to Earnings (P/E) ratio of 22.0 while the S&P 500 average is 15.97
The company has a Price to Book (P/B) ratio of 10.59 in contrast to the S&P 500's average ratio of 2.95
Hershey Company is a Consumer Staples company, and the sector average P/E and P/B ratios are 24.36 and 4.29 respectively