Tootsie Roll Industries
All Tricks, No Treats
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Research Overview

INDEX:
S&P 500
Sector:
Consumer Staples
Position:
Short
Date:
Oct 18, 2017

After conducting a forensic financial and accounting review, Spruce Point believes Tootsie Roll Industries (NYSE: TR), a candy company, is out of step with consumers and the industry, has been failing to provide significant financial disclosures and has inflated operating cash flows. Based on our investigation, we estimate 25% to 50% downside risk. 

The report highlights several key concerns with the company, including:

  • We believe the demand for sugary candies has continue to drop 
  • Evidence of opaque financial disclosures, overstated gross margins and inflated operating cash flows
  • We question why no steps have been taken for Tootsie insiders to sell the Company, despite previous allusions
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