'Not Your Father's Hostess': Remarkable Comeback Has Twinkies Distributor At Strong Buy

In one of the most remarkable turnaround stories in recent memory, Hostess Brands, Inc. TWNK is flying high since its IPO last November. Shares of the iconic brand have already gained 25 percent since its debut, and analysts are beginning to take notice.

Equity research firm C.L. King & Associates has initiated coverage on Hostess with a Strong Buy rating, citing the company as a compelling turnaround story within the packaged goods industry and set a $20 price target.

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Following a Chapter 7 bankruptcy and subsequent purchase by Dean Metropoulos and Apollo Global Management, Hostess has been rebuilt from the ground up — utilizing automation to reduce cost, closing plants, new product innovation and distribution model have led the company to best in class operating margins.

Textbook Turnaround

C.L. King & Associates was so impressed with the company’s turnaround, it believes the company will one day be a Harvard Business School case study on how to turn around a business.

“We expect to see momentum build over the next few years as TWNK continues to rebuild its market share. TWNK has several competitive advantages vs. peers that should allow it to better service the rapidly growing convenience store market. This is not your father’s Hostess.”