Insider Activity: The Hershey Company (HSY)

A chocolate bar, one of the most recognized brands built by Hershey

Multiple insiders at The Hershey Company (HSY) have been buying shares, even with the company trading close to all-time highs.

These buys include the CFO and President, and amount to nearly $500,000. More buys may be coming in the next few days.

Typically, corporate insiders pick up shares when they sense an undervaluation. The only reason for insiders—already picking up a paycheck there—to buy more shares in the open market are in anticipation of a bigger move higher.

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  • Over the past several years, offers have been made to buy out Hershey, but all have fallen flat. The voting majority rests with The Milton Hershey Foundation, but another yet-unknown move may be on the way to unlock shareholder value.

    The fact that the president and CFO are buyers now, as opposed to a vice president or director buy, is a bullish sign, even following the rally in shares year-to-date.

    Action to take: At these prices, shares are simply too rich. Consider a call option instead, such as the January 2020 $140 call, which has a current bid/ask spread around $4.30.

    While that option could expire worthless, it could also double within two to three months if shares keep moving higher at the rate they have.