Will Hershey (HSY) Stock be Affected by Trust's Governance Changes?
NEW YORK (TheStreet) -- Shares of Hershey (HSY) - Get Report are up by 0.61% to $110.62 in mid-morning trading on Momday, as The Hershey Trust Co. has come to an agreement with the Attorney General of Pennsylvania that analysts say could make the chocolate company easier to acquire.
Pennsylvania's Attorney General has been investigating The Hershey Trust Co., which owns 80% of the chocolate company's voting shares, about the misuse of funds and conflict of interest, the Wall Street Journal reports.
This past Friday the trust agreed to make "significant governance changes" that could facilitate an acquisition by Mondelez (MDLZ), the maker of Oreo cookies and Cadbury chocolates, CNBC reports.
The parties involved in the agreement are currently finalizing the terms of the changes. "We have reached and agreement in principle and are working on the final details in productive discussions with the Office of the Attorney General," trust spokesman Kent Jarrell said in a statement.
Last month, the trust rejected a $23 billion purchase from Mondelez.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate HERSHEY CO as a Buy with a ratings score of B. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: HSY
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