A Sweet Play on an Iconic Brand

Featuring Louis Llanes

Technical trader Louis Llanes, founder of Wealthnet Investments, examines the recipe behind Hostess Brands’ business model. Louis argues that the Twinkie maker has emerged from bankruptcy with a strong business model and is now an attractive name to own. Filmed on June 26, 2018.

Published on
28 June, 2018
Topic
US Dollar, US Economy, Micro
Duration
10 minutes
Rating
1

Comments

  • ml

    michael l.

    2 7 2018 01:17

    0       0

    Great piece, Louis. Agree with your thoughts - strong FCF, manageable debt, excellent management and Dean M. is highly aligned with shareholders. They also did a recent acquisition that will contribute meaningfully to EBITDA starting in 2019. At $12 and below, I will add more. The warrants are a great long-term play here also - TWNKW.

    • AC

      Andrew C.

      7 7 2018 03:32

      0       0

      hmmm - Warrants are so far in the money there is no better payoff when compared to the stock - note the warrant multiplier is 0.5, so 2 warrants get one share. Warrants would have been a great trade when first re-listed at 35cents

  • NI

    Nate I.

    1 7 2018 18:43

    0       0

    I don't see this company growing sales by 3% unless the management (talk about "expensive labor") has an epiphany and decides to make a product that affluent consumers want to buy. The one-percent notwithstanding, consumers are broke and unemployed, especially in the lower echelons of the wealth divide where sugar/chemicals masquerading as food sales occur, and rent will win-out over ho-hos. Recent sales history is $555M in 2014 to $327M in 2017. The strong dollar isn't going to help matters either. Thanks Louis and good luck, but I'll pass.

    • LL

      Louis L.

      2 7 2018 12:10

      0       0

      Thanks for comments. Look at the bankruptcy and company history and read annual reports and perhaps the sales difference will make sense. They are regaining shelf space. Time will tell.

  • KE

    Kathryn E.

    29 6 2018 10:50

    2       0

    I'm not entirely sure about the stock, but Louis' analysis is second to none

    • LL

      Louis L.

      29 6 2018 18:33

      1       0

      Thank you!!

  • YB

    Yuriy B.

    28 6 2018 14:07

    3       5

    If Hostess grows by 3% per year, it would only be due to the low IQ of Americans degrading further. Any sentient human who has even a few neurons firing and is literate enough to read about the science of healthy living currently understands the following: Hostess has no place in the diet of a self-respecting human. By eating a Twinkie, one is saying to society: I plan on robbing the healthcare system and thus the rest of society of time and money. People who eat foods like Twinkie's will face consumption taxes .... or else civilization will continue to crumble. If you have even a few firing neurons, this is not debatable.

    • LL

      Louis L.

      28 6 2018 15:53

      4       0

      Of course. Not healthy. I anticipated comments like this. Thanks for watching.

    • PP

      Patrick P.

      28 6 2018 18:11

      6       1

      Yuriy...."lighten up frances".....Stressing out kills more people than a couple Twinkies.

    • RM

      Robert M.

      28 6 2018 18:24

      3       0

      Tremendous comment. Well done.

    • DK

      Dmitriy K.

      28 6 2018 23:25

      2       0

      Well said. This could be a good company in the business sense, but the product is shit regardless of whether it sells or not. Perhaps if they somehow pivoted to organic twinkies without using refine life draining ingredients things could be different, but doing this would most likely result in much lower margins.

    • TC

      Timothy C.

      1 7 2018 15:22

      5       0

      I am more interested in making money than virtue signaling.

    • WP

      William P.

      4 7 2018 14:45

      0       1

      Yuri. stand up, stretch and take a deep breath or two. Last I heard, no one was ever forced to eat a Twinkie. Perhaps and Gluten free Twinkie is just around the corner!