FL FLO Flowers Foods Loading... : Investor Sentiment and Bull/Bear Views

Premarket movers show Mag 7 stocks higher, crypto-linked shares rallying with Bitcoin, gold miners rising on Treasury buyback concerns, and mixed individual stock moves driven by earnings forecasts and analyst upgrades.

The author warns that dividend cuts and S&P 500 declines signal leverage and poor M&A are catching up, suggesting a bearish outlook on defensive equities.

The author argues Flowers Foods is simply undervalued even with its flaws, and that while waiting for revaluation investors collect a roughly 9.5% dividend that he claims is well covered. He also expects the stock to act defensively alongside gold on a future risk-off 'Greenland invasion' style day when tech stocks fall, and sees short-squeeze potential given 13% of shares shorted with over 6 days to cover. He states he averaged down to $9.94 after meh earnings, an impairment and flat guidance, and that he holds a large position.

The author argues that Trump's nomination of Warsh, who wants to end quantitative easing, will pull liquidity from markets and increase demand for dollars. In this environment, investors should own companies that generate substantial free cash flow and return it via dividends, such as Kraft, Conagra, and Flowers Foods, while selling companies that require dollars to operate. The main risk is that the Fed policy shift may not occur as expected or dividend stocks may not outperform.

Flowers Foods is a boring, stable defensive staple company that makes Wonderbread, Dave's Killer Bread, and other bread products and pays a dividend. Even amid wars or geopolitical conflict, people will still buy milk, eggs, and bread. It provides a product and business investors can understand and has beaten the S&P 500 since his last appearance, making it suitable when the market is expensive and risks are high.

Flower Foods makes bread products including Dave’s Killer Bread and Nature’s Own and is getting cheaper and cheaper. Lemelson has been buying because demand for staples like bread, milk and eggs persists through economic cycles; earnings have been remarkably good despite a heavy acquisition that likely overpaid, creating a bump-in-the-road opportunity. He calls it not as screaming a bargain as Centene but a boring, defensive value holding.