The Prudent Investor


How Flowers Foods Inc. Makes Its Money, And Wrap-Up
May 3, 2007, 7:39 am
Filed under: Consumer Goods

The smallest company under consideration is Flowers Foods Inc.

Flowers Foods is involved in the production and marketing of bakery products in the United States. Major brands include Flowers, Nature’s Own, Whitewheat, ButterKrust, Sunbeam, and Roman Meal.

The company expects to see a 5% growth in sales this year, which is on the low end of what I would like to see, and about half the sales increase seen in the past two years. For this particular portfolio, this company is just too small. There is a real reduction of risk over time when a company offers a diversity of products and markets, and the narrow focus of each do not make it suitable for this portfolio, so I will remove it from consideration.

To recap the overview of the seven companies with which I started:

Removed from consideration:

  • Unilever NV (UN)
  • ConAgra Foods Inc. (CAG)
  • Flowers Foods Inc. (FLO)

Remaining in consideration:

  • Pepsico, Inc. (PEP)
  • McCormick & Co. Inc. (MKC)
  • The J. M. Smucker Company (SJM)
  • Corn Products International Inc. (CPO)

As I write this I have no idea how I am going to compare the giant Pepsico with the other three small companies. However, next post I will momentarily pause to not only find a reasonable answer, but also to return to SJW, the water company in the portfolio. A few weeks ago I received the company’s annual report, so I will report the information found within. I have long been a proponent of owning no more companies that I can keep track of, which means that I need to be able to at least look over the annual report and quarterly reports. I also like to read news articles about the companies I own and will report anything of significance in this regard as it concerns companies within the Prudent Investor Portfolio.

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2 Comments so far
Leave a comment

Just want to let you know, I for one, appreciate all the work that you do to report on these companies. Your a big help to those of us who are more than a little bit “challenged” in researching, knowing what and how to look and explaning it! Thanks a bunch & keep the “stuff” coming.

db

Comment by David Brotton

db –

Thanks for the kind words. I hope that we can all learn from this experience.

Comment by Admin




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