About TOOTSIE ROLL INDUSTRIES INC
Tootsie Roll Industries, Inc., together with its subsidiaries, engages in manufacture and sale of confectionery products in the United States, Canada, Mexico, and internationally. It sells its products under the Tootsie Roll, Tootsie Pops, Child's Play, Caramel Apple Pops, Charms, Blow-Pop, Charms Mini Pops, Cella's, Dots, Junior Mints, Charleston Chew, Sugar Daddy, Sugar Babies, Andes, Fluffy Stuff, Dubble Bubble, Razzles, Cry Baby, NIK-L-NIP, and Tutsi Pop trademarks. The company sells its products directly to wholesale distributors of candy, food and groceries, supermarkets, variety stores, dollar stores, chain grocers, drug chains, discount chains, cooperative grocery associations, mass merchandisers, warehouse and membership club stores, vending machine operators, e-commerce merchants, the United States military, and fund-raising charitable organizations, as well as through food and grocery brokers.
Tootsie Roll Industries, Inc. was founded in 1896 and is based in Chicago, Illinois.
TR operates in the Manufacturing | Food Products | headquartered in CHICAGO, Illinois | approximately 2,000 employees | led by CEO Ellen R. Gordon.
The $3.1B question: What happens when a company this good becomes this expensive?
In the constellation of American capitalism, certain companies shine brighter than others — not because they are inherently more valuable, but because they have positioned themselves at the nexus of forces that shape the economy. TOOTSIE ROLL INDUSTRIES INC is one such company.
At $3.1B in market capitalization, TOOTSIE ROLL INDUSTRIES INC (TR) currently ranks #249 in our quantitative model, with a composite score of 75.6/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives TR the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 68/100 | 30% | Strong |
| Value | 86/100 | 15% | Attractive |
| Momentum | 63/100 | 25% | Steady |
| Investment | 32/100 | 10% | Low |
| Stability | 84/100 | 10% | Fortress |
| Short Interest | 57/100 | 10% | Normal |
The quality score of 68/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 9.7%
- Net Margin: 15.3%
- Gross Margin: 34.1%
These aren't just good numbers. They're the kind of numbers that make TR a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like TR."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. TR is quality defined.
- Momentum is real. With a momentum score of 63/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 32.6x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
TOOTSIE ROLL INDUSTRIES INC is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, TR is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 75.6/100 | Rank: #249 of 3,571 stocks
Sector: Consumer Staples
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.