I like to think that I have much in common with Warren Buffett. Well, OK, at least one thing: We both prefer to invest in companies that we understand. The operations of certain high-tech firms such as Emulex
Anything involving beer, junk food, and sports, however, falls well within my core area of expertise. Chocolate, for example, is a product that anyone can relate to. Except for a few individuals (such as my soon-to-be sister-in-law) of questionable celestial origin, everyone universally loves chocolate, and domestically there's only a handful of players waiting to satisfy that demand. Combined, Hershey
Each of these companies was likely pleased by the findings of a new health study recently conducted by cardiologists in Greece. According to the study, chocolate can actually help prevent heart attacks. That's right; chocolate is high in flavonoids, natural antioxidants that help fight damage that oxygen can cause to the endothelial cells that line the walls of blood vessels. I wasn't aware that oxygen caused any bodily damage, but then maybe that's why I avoid biotech stocks.
Cacao has long been used medicinally, but discovering that chocolate can stimulate endothelial function, make blood vessels more flexible, and actually improve cardiovascular health came as something of a revelation. The scientists cautioned, though, that too much chocolate could lead to weight gain, offsetting any potential benefits.
While it is doubtful that this study will have shoppers lining up at Wal-Mart
After posting record revenues and earnings on rising margins last quarter, management is forecasting double-digit earnings growth for the year. Though, with a PEG ratio of 2.4, the stock is fairly rich, and just a nibble may be enough.
Hungry for more chocolate news? Maybe these will help:
- Sweet Chocolate, Sour Soda, by W.D. Crotty
- Sweet Opportunity?, by Brian Gorman
- M&M's Colorless Campaign, by Rick Munarriz
- Hershey Gets in the Zone, by Brian Gorman
- Sugar High at Hershey, by Alyce Lomax
Fool contributor Nathan Slaughter prefers Hershey's Special Dark. He owns none of the companies mentioned.