Kellogg Company (K), General Mills, Inc. (GIS): There Is Something Going On With The Food Producers

Hershey has experienced a similar upside move, so there is indeed a real pattern with these companies. Just look at how flat and stable the charts are until a few months ago! Anyways, Hershey makes a variety of chocolate and other grocery products, and is projected to grow at a forward rate of 10% annually, the highest of the group. Along with this growth however, comes a very high valuation of 25 times forward earnings, which I feel is simply too expensive. Analysts seem to agree, as the average analysts’ price target on The Hershey Company (NYSE:HSY) is over 6% lower than the stock’s current price.

Hershey 1-Year Performance

Conclusion

There is definitely an influx of optimism surrounding the major food producers, and I feel that the charts are actually starting to look bubble-like. While these companies all have great strategies for growth, pay nice dividends, and have been very stable and rewarding for past investors, are they really in 30% better shape than they were a few months ago? I think not.

The article There Is Something Going On With The Food Producers originally appeared on Fool.com.

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