Morningstar - Hostess Brands Inc. Class A (TWNK) Hostess Reports Solid End to 2018 as Cloverhill Is Primed for Turnaround; Long-Term Thesis Intact

Report

Morningstar

Zain Akbari

EUR 100.00 For Business Accounts Only

Hostess Reports Solid End to 2018 as Cloverhill Is Primed for Turnaround; Long-Term Thesis Intact

We do not expect a large change to our $14 fair value estimate for narrow-moat Hostess as 2018 results approximated our targets. Even after the high-single-digit percentage after-hoursÂ uptick after results were released, we believe the shares are attractive as the market likely underestimates Hostessâ€™ brand strength.
For the year, sales rose 9.6%, but Hostessâ€™ adjusted EBITDA margin dropped about 780 basis points to 21.9%, primarily driven by the lower-margin Cloverhill business and cost inflat...

28/02/2019 14 EN

Underlying

Hostess Brands Inc. Class A

Hostess Brands is a packaged food company. The company produces Hostess?, Dolly Madison?, Cloverhill? and Big Texas? products at bakeries located in Emporia, KS; Columbus, GA; Indianapolis, IN; and Chicago, IL. In-store bakery products are produced at bakeries located in Southbridge, MA. The company has invested in baking and packaging technology, including installing two Auto-bake systems and fully-automated packaging systems. A portion of the company's products are co-manufactured and packaged under its brands and sold through its distribution facilities. The company's Direct-to-Warehouse distribution model uses centralized distribution centers and common carriers to fill orders, with products.

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US44109J1060 NASDAQ Stock Market United States

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Zain Akbari

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Hostess Reports Solid End to 2018 as Cloverhill Is Primed for Turnaround; Long-Term Thesis Intact

Hostess Brands to Be Acquired by the J.M. Smucker Co. for Approximately $5.6 Billion

Vermilion Short Shots: Technically Vulnerable Stocks

Vermilion Compass: Weekly Equity Strategy

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Sasol Provides Full-Year Production Update

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