NEW YORK (TheStreet) -- Shares of global chocolate giant Hershey (HSY) aren't cheap. At a price-to-earnings ratio of 25, the stock is trading six points higher than its industry average and five points higher than the P/E of the S&P 500 (SPY) , according to CNN Money. And with the stock at $94 on Monday at 1:30 p.m., Hershey investors are down 3.3% year to date, trailing the 7% gain of the S&P 500.
Hershey investors may be left feeling bitter.
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But why sell now -- especially since the stock is down almost 9% in the past six months? The optimal selling period is past. Now is the time to hold or even add to an existing long position.
With the stock still carrying a high analyst target price of $118, according to Yahoo! Finance, a better play is to develop a sweet tooth. If that high price target is right, Hershey could still produce gains of more than 25%. Even the mean analyst price target and median price target suggest gains of 10% and 8%, respectively.
Given the weak performance of the packaged food industry, it's easy to get discouraged. Bears are quick to point out that peers like Mondelez (MDLZ) and Nestle (NSRGY) are trading at much cheaper valuations, with P/Es of 16 and 23, respectively.