Hansen Natural (HANS) is giving back the last month’s gains today after reporting higher than expected sales and lower than expected margins. Both were explained by customers stocking up ahead of a price increase. Count on the same thing happening to Hershey’s (HSY) when they report a March quarter enhanced by customer stock-ups and an early Easter.
While it’s true that the sales were boosted by robbing sales from next quarter, that is a short term issue. I said last month that “Hansen should be able to maintain its current free cash flow yield as long as the company keeps growing, which suggests potential upside in line with the 30% growth rate this year. Unless the growth rate slows substantially, it looks like a keeper .”
That’s my story, and I’m sticking to it.
Disclosure: William Trent has no position in the companies mentioned.
$41.27 (03/03/08)
