Grupo Bimbo - Come For The Snacks, Stay For The 10-20% Upside

Grupo Bimbo (OTCPK:BMBOY) (BIMBOA.MX) is probably not a household name to most readers, even though this is the largest baked goods company in the world, operating in over 30 countries and selling over 13,000 products. Those who spend time in Latin American markets are probably familiar with the Bimbo bear mascot, but even those who aren’t probably recognized brands like Thomas’, Arnold, Entenmann’s, Ball Park, EarthGrains, and Sara Lee.

Bimbo didn’t have a great 2017, due in large part to weak margins, but 2018 looks to be a stronger year for the company in its two core operating regions (Mexico and U.S./Canada). While margin-dilutive remains a risk factor, margin improvements paired with modest low-to-mid single-digit revenue growth argue for a share price 10% to 20% higher than today.

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Grupo Bimbo - Come For The Snacks, Stay For The 10-20% Upside

Investopedia: With Scale, Flowers Foods Has Built A New Future For Itself

Tech investors may turn their noses up at consumer staples companies as hopelessly low-growth and boring, but Flowers Foods (NYSE:FLO) is a good example of what a prudently aggressive management team can accomplish. In 2000, the company served about one-third of the country; now that figure is up over 75% and the company has yet to focus on the Midwest and Pacific Northwest regions.

Along the way, Flowers blend of organic and acquired growth, scale, and operating leverage has produced nearly 9% compound revenue growth and almost 15% free cash flow growth. That, in turn, has fueled one-year, five-year, and 10-year stock appreciation of almost 70%, 100%, and 500%. While I'm not calling for an end to Flowers gaining share or growing its business, I do wonder if the shares aren't in need of a little rest, as the valuation no longer seems quite so compelling at these levels.

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http://www.investopedia.com/stock-analysis/081413/scale-flowers-foods-has-built-new-future-itself-flo-cpb-k-mdlz.aspx