This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Valuation a Thorn in Flowers Foods

NEW YORK ( TheStreet) -- For all of the talk about how slow-growing and boring companies in the consumer staples sector seem, tech investors in Microsoft (MSFT - Get Report), Cisco (CSCO) and Intel (INTC) are likely kicking themselves for not having picked Flowers Foods (FLO - Get Report), which has blossomed over the past decade into an incredible growth story.

Not only has the company's stock price posted gains of 70% in the past 12 months, but Flowers Foods, whose baked goods now serve more than 77% of the country (up from 33% in 2000), demonstrates what is possible when a strategically aggressive management team aligns great vision with pinpoint execution.

This performance, which has been the result of steady organic growth and market-expanding acquisitions, has not been lost on the Street. Flowers has doubled its stock price in the last 5 years, while shares have bloomed with 10-year gains of more than 500%, means that yeast is not the only thing rising from the company's ovens.

As impressive as the company's operating leverage has been, contributing as it has to double-digit compounded revenue growth (not to mention free-cash-flow growth of close to 15%), I do wonder how long Flowers' incredible run can last.

Don't confuse this with a sudden lack of confidence in management. There's no question that the maker of Wonder Bread knows how to make "bread" for its investors. But with Flowers having now scaled its market as far as the west coast due to recent brand acquisitions of Sara Lee and Earthgrains, the stock price presumes there is more territory and growth to conquer.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
FLO $22.31 -0.89%
MSFT $47.87 10.45%
AAPL $130.28 0.47%
FB $81.53 -1.07%
GOOG $565.06 3.30%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs