Why You Should Watch Flowery Foods, Inc. (NYSE:FLO)?

Posted by admin January 24, 2014 0 Comment 935 views

After an eventful and robust growth of the food companies in the year 2013, there are now some bunch of issues that lies ahead for these companies as they tread through 2014.  While the outlook for these companies remain dull, Deutsche bank has some hope in store for the United States’ second largest bread maker, Flowery Foods, Inc. (NYE:FLO)

Why Flowery Foods Look Positive?

The analyst at Deutsche bank, Eric Katzman holds views that Flowery Foods has lot of room for growth, as it completely took over the assets of Hostess, back in July. This gives Flowery Foods an extra edge to increase its market share in the forthcoming set of years. With the Hostess acquisition, the company  is able to get access to most of its assets, which includes 20 baking plants scattered across a large strip of the Unites States.  Katzman calls it a smart move as he states that the company waited for the right moment to target the Hostess acquisition. While it always had  an option to buy Hostess, but instead they took over the assets at the best lowest prices after the liquidation.

In spite of a lowered guidance by the company for the fiscal year 2013, Katzman has all faith on the abilities of the company as he keeps aside these facts in light of the pressure that the baking industry is facing right now. In contrast to the negative outlook over the food industry, Katzman has comparatively neutral outlook on this company.

Not In For Canada Bread

In the meanwhile, Flowery Foods is no more pursuing the acquisition of Canada Bread Co Ltd (CBY.TO). As per the official reports, Grupo Bimbo (BIMBOA.MX) is leading the list of prospective buyers now. The proposed acquisition from the majority stakeholder Maple Leaf Foods Inc, will roughly cost $164 billion.

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