Consumer Products

Is Warren Buffett's Sweet Tooth Acting Up Again?

Last week, an analyst at Gordon Haskett Research was trolling through flight records and noticed that a corporate jet belonging to the Hershey Company visited Omaha, Nebraska, on June 12. The plane was on the ground in Omaha for a couple of days, according to a report in the New York Post, citing analyst Don Bilson who apparently has a track record of finding financial industry nuggets in aircraft flight data.

A couple of days in Omaha is enough time to have a chat with Warren Buffett, who has owned See’s Candies for nearly half a century. Buffett also purchased $2.1 billion in preferred Wrigley stock to assist privately held Mars Inc. in its acquisition of the iconic chewing gum company. Buffett has a deep faith in Americans’ penchant for junk food.

As of Friday’s close, Hershey’s market cap was $36.25 billion. The stock trades within a buck of its average price target of $176.50. In April, Goldman Sachs raised the chocolate giant from Neutral to Buy and lifted the price target from $171 to $181. Hershey’s stock traded up less than 1% Monday morning at $176.00. If that price holds, it will be a new 52-week high.

Although Hershey is publicly traded, the company is controlled by the Hershey Trust. Bilson noted, “he [Buffett] may be the only realistic buyer who would win approval from the Hershey Trust.” Buffett’s cash pile of some $145 billion is more than enough to pay cash for Hershey, including a nice premium.

A Hershey spokesman told the Post that it does not comment on rumors and speculation. Berkshire Hathaway did not respond to a request for comment.