New Highs Just for Signing Up

 | Mar 27, 2013 | 2:54 PM EDT
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Sometimes I wonder do the people in the C suite at Hershey (HSY) marvel that their stock keeps going higher. Do they sit there and say, "How is it possible that we are so loved?" Don't you think they have to be saying that at Campbell (CPB) and Kellogg (K)? These two companies have under-earned or disappointed repeatedly, but this doesn't even seem to matter anymore.

Or how about McCormick (MCK)? When I last pulled up with them, the stock had just been crushed off a terrible quarter, and management was embarrassed but defiant that the stock would come back when people saw how the rest of the year would shake out.

Yet we haven't seen a quarterly report since then, and the stock just hit an all-time high.

If you go read the annual of Hormel (HRL), you will see a company almost apologetic at the snail's pace of the business, but one that has always rewarded investors with higher dividends. The darned stock of the Spam maker now trades like a biotech.

How about the people at DirecTV (DTV)? What do you think they are noodling over when they see their stock on the all-time high list? When this company last reported, the stock got hammered on a Venezuelan translation issue. Things have only gotten worse there, and has caught some downgrades -- but the stock has long since left the naysayers in the dust.

I could go down the list of all of the all-time highs and marvel that they are simply good companies doing fine -- not great companies performing superbly. It is almost as if it is too easy to get on the list. MasterCard (MA), so-so last quarter. Amgen (AMGN), nothing really growing too fast there. Leggett & Platt (LEG) -- bedsprings!

Which, again, leads me to conclude that this rally is simply a wholesale revaluation of all stocks except for the true stumblebums. Companies with good balance sheets and nice earnings are being rewarded with coveted new-high slots just for signing up.

It's amazing. While it is so easy to say, "That's it, it can't go on," everybody who has done that's been just dead wrong.

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