Hershey Media Report 8/18/16

Trade Coverage

1. Hershey Looks Mighty Tasty

   Aug 17, 2016 | Dragonfly Capital

   By Greg Harmon
   
   
   Remember back in June when Mondelez International (NASDAQ:MDLZ) made a $23 billion takeover bid for Hershey Company (NYSE:HSY)? The stock jumped from around $96 to $112. The bid was quickly rejected as analysis focused on the problems of a trust running a company. I kept the stock on my radar, waiting for signs of a pullback. But they never came. In fact I started saying that the stock looked more like it was ready for another move higher.
2. Why accounting errors won't stop Hain takeover speculation — or 6 hungry potential buyers

   Aug 17, 2016 | Food Dive

   By Carolyn Heneghan
   
   
   Discussion of another potential Mondelez bid in a greater article about potential buyers in the food industry.
3. 2 Incredibly Cheap Big Brand Stocks

   Aug 17, 2016 | The Motley Fool

   By Leo Sun
   
   
   Brief mention of another potential Mondelez bid in the context of Mondelez stock.

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Trade Coverage

1. Hershey Looks Mighty Tasty

   Aug 17, 2016 | Dragonfly Capital

   By Greg Harmon

   Remember back in June when Mondelez International (NASDAQ:MDLZ) made a $23 billion takeover bid for Hershey Company (NYSE:HSY)? The stock jumped from around $96 to $112. The bid was quickly rejected as analysis focused on the problems of a trust running a company. I kept the stock on my radar, waiting for signs of a pullback. But they never came. In fact I started saying that the stock looked more like it was ready for another move higher.

   That move looks like it's underway right now. The chart below shows how a pop higher to consolidation between 108 and 112 has started to drift to the upside. The momentum indicators are improving. The RSI is turning back higher and the MACD is starting to level and remains positive. The Bollinger Bands® have tightened back to the point just before the move higher started back in May.

   A Measured Move higher would target 125 above. There is some interest information in the longer-dated November and January Calls as well. The biggest open interest in November is at the 120 Call Strike and in January there is big open interest at the 119 and 130 Strikes. There is also open interested accumulated from 90 to 105 on the Put side in January. September monthly options are big, near the current price with big open interest at the 110 Calls and 115 Puts.

   None of this means that anything will happen with this stock but there does seem to be a lot of upside interest after the September expiry. And the price and momentum are shifting higher.

   So if you were to forgot about the prior narrative and just follow price, you'd probably buy this stock now for a break out. So……

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2. Why accounting errors won't stop Hain takeover speculation — or 6 hungry potential buyers

   Aug 17, 2016 | Food Dive

   By Carolyn Heneghan

   Mondelez

   Mondelez has proven it’s willing to make the right acquisition moves based on its Enjoy Life Foods purchase last year, which positioned the company within better-for-you snacks and ingredients, and its rejected attempt to acquire Hershey earlier this summer. Last week, Mondelez announced it would acquire the license for Cadbury biscuits, so the capital and interest are there.

   Hain would also fit well into Mondelez’s growth strategy, which the company outlined last year and includes generating half of total revenue from better-for-you products in the next five years. Hershey has some better-for-you brands, like SoFit and Krave, but otherwise, like Cadbury, primarily aligns with sweets and indulgences. Hain would be a major step toward that healthy revenue goal.

   But like Kellogg, Mondelez’s portfolio is more focused on snacks than general grocery. The company even moved to divest its coffee business in a deal to create Jacobs Douwe Egberts last year, which could demonstrate that Mondelez may not be willing to go too far outside of its current set of product segments.

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3. 2 Incredibly Cheap Big Brand Stocks

   Aug 17, 2016 | The Motley Fool

   By Leo Sun

   Mondelez International

   Packaged foods giant Mondelez sells well-known brands like Cadbury, Oreo, Ritz, Chips Ahoy, and Philadelphia cream cheese. But like many of its multinational peers, Mondelez has been hit hard by currency headwinds over the past few quarters.

   Last quarter, Mondelez's revenue fell 18% annually due to steep double-digit declines in Europe and Latin America. But on an organic basis, which excludes currency impacts, acquisitions, divestitures, and other expenses, sales rose 1.5%. That figure looks paltry compared to PepsiCo's 3.3% organic growth last quarter, but Mondelez could eventually buy other big companies like Hershey's to grow inorganically or expand its presence in major markets like China. Analysts expect Mondelez's revenue to fall 11% this year but possibly rebound 2% next year.

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