Is Buying Hershey Still Like Buying a Box of Chocolates?

NEW YORK (TheStreet) -- They say life is like a box of chocolates and you never know what you're going to get. Although the fundamental principle of that axiom often falls to the ranks of the underappreciated, it reminds me of the unpredictable nature of investing. It has always been a challenge, however, to say the same about packaged food giant Hershey (HSY) -- a stock I have always considered to be pretty expensive from the standpoint of its price-to-earnings multiple of 23. It seems Wall Street always has some different ideas when it comes to valuations, and I'm now realizing that this just might have been one of those stocks that I allowed to get away.

Looking at the performance chart of Hershey over the past three years has made me realize I am not as smart as I think I am. Although this is not the first time I have come to this conclusion, it's even more egregious that this is the second time I have repeated this same mistake on this particular stock. Two years ago upon the completion of the first run-up of 50%, when the stock rose to $52 from $35, I felt there was no way that it would be sustainable.

Hershey's performance in recent years should quiet the critics who say the stock looks sweet but doesn't deliver.

To my delight it showed a slight dip (first red bar in the chart) and retraced slightly. But like an amateur, I got greedy and wanted more. The stock then showed some resiliency and recovered slightly, but only to repeat the same pattern (second red bar). Mind you, this was at the height of the financial crisis generating broad economic concerns -- the entire market had a bearish bias. So again, I stood idle waiting for the decline that never arrived. Since then the stock has gained another 50% to reach its current level of $68 as of this writing after having received an upgrade suggesting a price target of $78.

What hurt my chances with Hershey (aside from some miscalculations) was the emphasis placed (too much so) on not only valuation but also relative/comparable analysis. What I had begun to notice several years ago, though, were the less-than-stellar earnings performances from within the packaged-food sector -- and from some prominent names such as Kraft (KFT) and my kids' new favorite stock, Kellogg (K).

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