Hershey (HSY - commentary - Cramer's Take) is trading fractionally higher today, in part because of an announcement that the company will buy back $250 million of its stock. At $49.89 a share, the chocolate maker is within 2 points of its 52-week low and down 10% year to date.
If I were a Hershey bull, I'd be rather unimpressed by the buyback, at least on a day when Zions Bancorporation (ZION - commentary - Cramer's Take), a company just three-quarters the size of Hershey, announced a $400 million repurchase program.
If you don't live near Salt Lake City, you may not have ever heard of Zions. But the fact that it has pledged to buy back 4.7% of the company is quite impressive, when Hershey's repurchase program is equal to just 2.2% of the shares outstanding at current levels. Both companies have similar earnings growth and dividend yields.
With that in mind, still trading at 20.7 times expected 2006 earnings of $2.41, Hershey does not stand out as a stock you have to run out and buy right here.
In keeping with TSC's editorial policy, David Peltier doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.
P.S. Will you be there when Cramer makes his next move?
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David Peltier is a research associate at TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback; click here to send him an email.
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