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Actionable news in FLO: FLOWERS FOODS Inc,

Flowers Foods - Half Baked?

Summary

FLO has a strong presence in the baked goods industry.

The share price has been beaten down on a double whammy of bad news.

The dividend is in good shape and the current valuation is attractive.

I remember the first time I tried Dave's Killer Bread - a friend of mine introduced me to it. "Wow, this bread is really good!" He replied "I know right? And the guy that makes it is an ex con who learned how to bake in prison, how awesome is that!"

Of course, when I buy Dave's Killer Bread my money doesn't go to an awesome baker named Dave, instead it goes to Flowers Foods (NYSE:FLO). FLO is the second largest baker of in the United States that owns a variety of brands, including DKB. In recent years it has grown by acquisition, acquiring brands like DKB as well as a variety of products from the old Hostess Brands when it declared bankruptcy in 2013.

They produce breads, buns, rolls, tortillas and snack cakes that are distributed through out the U.S. and reach about 85% of the American people.

Courtesy of Flowers Foods Investor Presentation

Courtesy of Flowers Foods Investor Presentation

FLO reported Q2 2016 earnings on August 10, posting EPS of $0.26 which were in line with analyst expectations and unchanged year over year. However, management went on to revise it's 2016 guidance by decreasing adjusted it's adjusted EPS to $0.90 - 0.95. Allan Shiver went on to explain:

"Our revised guidance takes into consideration soft consumer demand in the bakery category, as well as heightened promotional activity in our industry. We have already taken steps to address underperforming markets and improve profitability. Those markets have begun steady improvement, and as...


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