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Valuation a Thorn in Flowers Foods

Stocks in this article: MSFT CSCO INTC FLO CPB CAG BIMBOA.MX

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), Cisco (CSCO) and Intel (INTC) are likely kicking themselves for not having picked Flowers Foods (FLO), 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.

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