Are Smart Investors Making the Right Decision? Hostess Brands Inc. (TWNK)

Hostess Brands Inc. (NASDAQ: TWNK) stock fell -0.29% on Friday to $24.26 against a previous-day closing price of $24.33. With 1.53 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.88 million shares. During the session, the Packaged Foods company that operates in wider Consumer Defensive sector, reached to the highest price of $24.59 whereas the lowest price it dropped to was $24.10. The 52-week range on TWNK shows that it touched its highest point at $24.91 and its lowest point at $16.76 during that stretch. It currently has a 1-year price target of $26.89. Beta for the stock currently stands at 0.57.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TWNK was up-trending over the past week, with a rise of 1.59%, but this was up by 6.17% over a month. Three-month performance surged to 19.92% while six-month performance rose 16.92%. The stock gained 41.05% in the past year, while it has gained 18.81% so far this year. A look at the trailing 12-month EPS for TWNK yields 0.92 with Next year EPS estimates of 1.10. For the next quarter, that number is 0.21. This implies an EPS growth rate of 5.30% for this year and 14.82% for next year. EPS is expected to grow by 10.62% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 9.80%.

Float and Shares Shorts:

At present, 137.91 million TWNK shares are outstanding with a float of 133.07 million shares on hand for trading. On Jul 14, 2022, short shares totaled 6.13 million, which was 4.43% higher than short shares on Jun 14, 2022. In addition to Mr. Andrew P. Callahan as the firm’s Pres, CEO & Director, Mr. Michael J. Gernigin serves as its Sr. VP, Chief Accounting Officer & Corp. Controller.


Institutional Ownership:

Through their ownership of 107.41% of TWNK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 66.58% of TWNK, in contrast to 37.80% held by mutual funds. Shares owned by individuals account for 3.43%. As the largest shareholder in TWNK with 15.88% of the stake, BlackRock Fund Advisors holds 21,678,678 shares worth 21,678,678. A second-largest stockholder of TWNK, The Vanguard Group, Inc., holds 15,661,207 shares, controlling over 11.47% of the firm’s shares. Dimensional Fund Advisors LP is the third largest shareholder in TWNK, holding 8,808,801 shares or 6.45% stake. With a 7.57% stake in TWNK, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 10,338,464 shares are owned by the mutual fund manager. The Janus Henderson Triton Fund, which owns about 4.27% of TWNK stock, is the second-largest Mutual Fund holder. It holds 5,823,832 shares valued at 135.0 million. Vanguard Total Stock Market Index holds 3.00% of the stake in TWNK, owning 4,088,144 shares worth 94.76 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TWNK since 12 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TWNK analysts setting a high price target of $30.00 and a low target of $25.00, the average target price over the next 12 months is $26.80. Based on these targets, TWNK could surge 23.66% to reach the target high and rise by 3.05% to reach the target low. Reaching the average price target will result in a growth of 10.47% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TWNK will report FY 2022 earnings on 02/28/2023. Analysts have provided yearly estimates in a range of $0.98 being high and $0.94 being low. For TWNK, this leads to a yearly average estimate of $0.96. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Hostess Brands Inc. surprised analysts by $0.00 when it reported $0.22 EPS against a consensus estimate of $0.22. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.23 and the low estimate is $0.19. The average estimate for the next quarter is thus $0.21.

Summary of Insider Activity:

Insiders traded TWNK stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 25 while that of sell transactions has risen to 32 over the past year. The total number of shares bought during that period was 521,729 while 230,396 shares were sold.

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