(01-08-2016, 11:06 AM)rapidacid Wrote:(01-07-2016, 02:33 PM)EricL Wrote: I think your numbers for HSY are off, they aren't trading anywhere near a high 30's multiple. Analysts are estimating $4.10 in EPS for 2015 and $4.40 for 2016, which gives a PE range of 19.5-20.9 at the current share price.
I think there's bad data out there for HSY. TDA has last 4 reported quarters total earnings at $4.08 / share but when I look at M* data I see the 2nd to last reported quarter at $-0.44 which aggregates to $2.31 for the same period ( all other quarter numbers are different from TDA too )
So, not sure what to believe but at $86.3 / share price the P/E looks to be between 21 and 37.
Fwd 2016 estimates I see $4.40 for a forward P/E of 19.6
I like CALM, INGR and MO moving forward in this sector
TDA must be using the "adjusted" numbers while M* is using the reported numbers. The Q2 2015 numbers were a reported loss of 47 cents per share, which included an "impairment" charge of $1.13 per share because:
Quote:Additionally, the company performed an initial assessment of the fair value of the Shanghai Golden Monkey (SGM) business as a result of several contributing factors. Thus far in 2015, SGM net sales and profitability have been significantly lower than initial expectations. In addition, as part of the ongoing integration process, the company has continued to assess the quality of SGM’s accounts receivable and existing distributor networks. As a result of this assessment, the company has recorded an initial non-cash goodwill impairment charge of $249.8 million, or $1.13 per share-diluted. The company expects to finalize its valuation assessment in the third quarter of 2015 and additional charges, including charges related to other long-lived assets, may be required. The company anticipates completing the acquisition of the remaining 20% of SGM in the fourth quarter of 2015, but the timing and terms will be informed by the results of the ongoing assessment.
I've complained before about how tough it is to nail down earnings. My shortcut is to discount "adjusted" numbers and stick with GAAP/reported because it is waaay simpler and some companies (I'm looking at you, JNJ) seem to have these adjustments all the freaking time. Yeah, maybe HSY is better than most, and maybe the Shanghai Golden Monkey debacle is really a rare misstep for the company, but even using the "adjusted" Q2 figure, I get a P/E of almost 24, even generously assuming they earn $1.00 per share in Q4. ($84.92/$3.58).
But even with that adjustment and assumption, the yield, payout ratio, earnings growth, and dividend growth underwhelm me.
I don't know. I do like the idea and story of HSY, and I am reall hankering for more consumer staple ballast to my portfolio. Perhaps if the price keeps falling, I'll reconsider. Thanks for the opinions!