_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Hostess Brands, Inc. (XNAS:TWNK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TWNK
Name:
HOSTESS BRANDS, INC. (XNAS:TWNK)
Sector:
6.67M
Industry:
Packaged Foods
CEO:
Mr. Andrew Callahan
Total Employees:
2,600
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -24.83% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HOSTESS BRANDS, INC.(TWNK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND PACKAGED FOODS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
22.87
One Month Price Target:
$22.94
Six Month Price Target :
$23.31
Likely Price in One Year's Time:
Ticker:
$23.75
Likely Trading Range Today Under (Normal Volatility)
$22.83
Price Upper limit ($) :
$22.95
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$22.13
This week:
$21.22
This month :
$19.57
Other Primary facts
Market Cap:
3.11B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
136.50M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
8.16%
-9.69%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$26.29
$24.69
$19.45
$21.05
Medium risk (<10%) entry points
Buy Call
Sell Call
$24.17
Buy Put:
Sell Put:
$23.83
$21.56
$21.91
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TWNK
Sharpe Ratio:
4.60%
Comparison:
TWNK, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 250.78% higher than the industry
& ratio is 101.69% higher than the market/S&P 500 average
Average Returns/Yield of
TWNK
Daily returns:
0.08%
Weekly returns:
0.42%
Monthly returns:
1.66%
Yearly returns:
8.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is 136.62% above industry average
Classification:
TWNK, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.93
Statistical test of Returns:
TWNK has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.61%
Weekly Volatility:
3.61%
Monthly Volatility:
7.21%
Yearly Volatility:
24.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.36%
Volatility in last five trading days has been -77.57% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.23%
Weekly VaR:
-7.22%
Monthly VaR:
-14.44%
How Much Can the price of
TWNK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-12%
Worst case (decline):
-50.03%
This translates to price declining to:
$20.17
This translates to price declining to:
$11.43
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TWNK is a 1.94% riskier investment compared to the market/S&P 500 & is -12.67% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -29.48% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TWNK
Beta in relation to market/S&P 500--0.57
Expected beta in 1 year's time:
0.498
Expected beta in 3 year's time:
0.704
Unlevered (debt free) Beta:
0.391
Beta in relation to Nasdaq (XNAS):
0.349
Beta in relation to all global stocks::
0.302
Beta Comparison & Analysis
Beta of competitors/peers::
0.662
Beta is -13.56% lower than peers
Average Industry Beta:
0.586
Beta is -2.34% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.40%
Sustainable growth rate is -29.30% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.129
Alpha is 923.79% above industry average alpha yield
Alpha is 818% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TWNK
Equity cost of capital:
0.071
Equity cost of capital is -1.31% below industry mean WACC
Unlevered (without debt) cost of capital:
4.83%
Before-tax cost of debt:
3.55%
After-tax cost of debt:
2.80%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.80%
WACC is 1.32% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$8.85
Revenue growth rate per share of (3Y):
1.77
Annual revenue growth rate is -94.29% below industry average
EPS:
$0.92
Expected Annual growth rate of EPS (3Y):
14.69%
Expected future EPS growth rate is -18.53% lower than the Packaged Foods industry
Free cash flow (FCF) per share:
$0.87
-
-
Debt per share
$8.04
EBITDA per share
$1.93
Valuation Analysis Today of
TWNK
P/E Ratio:
24.86
P/E Ratio of Competitors/Peers:
30.71
P/E ratio is -19.05% lower than main peers & is -35.67% lower than the industry
Stock price/value with industry average P/E ratio: $35.55
TWNK is -35.67% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.58
Price to sales ratio is 11.37% above the industry mean
P/B (Price to book value ratio):
1.77
Price to free cash flow: 26.30
-
Net income growth rate (3Y):
44.10%
Net income growth rate is 309.94% higher than the average industry net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
62.29%
Net debt to equity ratio:
49.55%
Debt to assets ratio:
30.98%
Net debt to assets ratio:
24.65%
Debt-to-asset ratio is -42.52% below industry average
Ability to repay debt:
Interest coverage ratio:
6.67
Interest coverage ratio is -97.29% less than industry average
Looking forward:
Debt growth rate:
-1.13%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.25%
Analysis of Key Statistics
Correlation of price movement with the market:
0.452
Statistical significance of correlation:
TWNK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.429
Stock price is 5.37% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.429
Correlation of price movement with Nasdaq (^IXIC):
0.066
Covariance of price movement with the market:
0.061
Kurtosis
4.534
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.021
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TWNK
Gross Profit Margin Ratio:
142%
Operating Profit Margin Ratio:
17.54%
Operating profit margin is 263.45% higher than the industry
Net Profit Margin Ratio:
142%
Effective Tax Rate:
25.80%
Effective tax rate is -36.72% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
7.22%
Return on equity (ROE) is -34.65% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.59%
Return on assets (ROA) is -19.60% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
2.32
Current ratio is -15.55% below industry average
Cash Conversion Cycle (days):
19.9
Cash conversion cycle is -59.48% below industry average
The remaining useful life of property plant & equipment is: 168.3 years
Stock based compensation to net income ratio:
1.84%
In-depth Efficiency Analysis
Revenue generated per employee:
464.9K
Each employee generates -41% less revenue than industry average revenue per employee
EBITDA generated per employee:
101.2K
Each employee generates -10% less EBITDA than industry average revenue per employee
Profit generated per employee:
48.9K
Each employee generates -6% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.6K
Each employee generates -169% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.2M
Each employee generates -169% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TWNK
KRISPY KREME, INC. (XNAS:DNUT)
Grocery Outlet Holding Corp. (XNAS:GO)
J & J SNACK FOODS CORP. (XNAS:JJSF)
CENTRAL GARDEN & PET COMPANY (XNAS:CENTA)
OLLIE'S BARGAIN OUTLET HOLDINGS, INC. (XNAS:OLLI)
INTER PARFUMS, INC. (XNAS:IPAR)
PRICESMART, INC. (XNAS:PSMT)
Sprouts Farmers Market, Inc. (XNAS:SFM)
LAUREATE EDUCATION, INC. (XNAS:LAUR)
Current Analyst Ratings
Strong buy�13%
Buy�17%
Hold�8%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.21B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
778.58M
430.09M
-
106.66M
195.95M
89.29M
23.51M
219.46M
-
39.41M
52.29M
263.01M
212.04M
127.13M
171.32M
44.19M
127.13M
Statement of Cash Flow
Date:
Period:
13.30M
Differed Income Tax :
7.32M
Stock Based Compensation :
2.34M
Change in Working Capital :
- 26740.00K
Accounts Receivables:
- 44848.00K
Other Working Capital:
10.56M
Other Non-Cash Items:
750.00K
Net Cash Provided by Operating Activities:
31.53M
Investments in PP&E:
- 23034.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
238.43M
-
238.43M
193.09M
59.87M
6.97M
498.36M
354.06M
706.62M
1.94B
-
-
42.82M
3.04B
-
3.54B
90.59M
14.13M
10.20M
-
110.40M
215.12M
1.10B
135.84M
1.56B
-
1.78B
14.00K
509.96M
17.7M
-
March 31, 2022 at 6:00:00 AM
998.04M
1.76B
3.54B
-
1.11B
872.6M
-
- 1825.00K
- 24859.00K
- 2792.00K
-
- 9680.00K
-
- 4997.00K
- 17469.00K
74.00K
- 10728.00K
238.43M
249.16M
31.53M
- 24859.00K
6.67M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
TWNK
2023
2024
2025
2026
2027
$29.50
$30.64
$31.81
$33.04
$34.31