Mark Yagalla
Gold, currencies, macro, commodities

Flowers Foods Looks To Be A Takeover Candidate

Executive summary:

  • The acquisition of Canada Bread by Grupo Bimbo makes Flowers Foods the next likely target in the fresh baked goods category.
  • Even without a buyout, Flowers Foods is attractive after growing sales 23.1% and earnings 31.9% in 2013 compared to 2012.
  • Expansion into California and the western part of the U.S. will boost the top- and bottom-lines going forward.
  • Recent insider buying and a P/E multiple similar to Canada Bread suggests a target price of $25.88, or upside of 25%.

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With the news that Grupo Bimbo is acquiring Canada Bread, I think Flowers Foods (NYSE:FLO) could be the next company to get acquired in the space. Shareholders of Canada Bread are receiving a 31% premium...

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