Tootsie Roll's Stuck in a Rut
by Jonathan Heller
It's been six months since my last piece on Tootsie Roll , and little has changed. So why am I revisiting the story? Because little has changed -- and that's not a good thing.
The products are still the same (though that's not necessarily negative), the margins are still relatively strong, though not nearly as strong as they once were, and Melvyn and Ellen Gordon are still in control. The stock price is almost exactly where it was nearly 12 years ago, while the S&P 400 Midcap Index, of which Tootsie Roll is a member, has more than doubled. On a total return basis, Tootsie Roll shares are actually up during that timeframe due to dividends, but barely.
This is the very disappointing story of a company whose brands are engrained into American culture yet whose shareholders have reaped little in the way of reward over the past...
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