Unlocking Value: Why Flowers Foods, Inc. (FLO) is the Top Food Stock to Buy for Under $20

We recently highlighted the 10 Best Food Stocks To Buy Under $20. Let’s dive into how Flowers Foods, Inc. (NYSE:FLO) compares to these stocks.

The food industry is a major part of the global economy. With the world’s population growing, the demand for food is rising. In 2023, the global food and beverage market was worth around $6.57 trillion and is expected to grow to $8.81 trillion by 2028. Notably, the Asia-Pacific region currently leads the market.

Technology is changing how food companies operate. Innovations like robotics and AI are making supply chains more efficient. Consumers are also leaning towards healthier options that support their well-being. Many now seek foods that not only satisfy hunger but also offer health benefits, such as aiding weight management or supporting heart health.

Despite inflation easing in some areas, food prices have surged by 28% since 2019, according to a survey by RR Donnelley. This has left many consumers frustrated, with more than a third starting to buy fewer items to save money. Experts suggest that once food prices rise, they often don’t come back down easily.

“The inflation may come back down, so you don’t see the big price increases. But outside of widespread depression, we don’t tend to see prices falling across the board,” said Claudia Sahm, chief economist at New Century Advisors.

Government actions can influence food prices, but many experts doubt significant changes are on the horizon. Jason Miller, a supply chain management professor, thinks the issues aren’t unique to the U.S.; they’re experienced worldwide. For now, it seems we have to wait and see how things unfold.

Another concern is the political climate. Trade tariffs could lead to higher food prices. Rakeen Mabud, chief economist at Groundwork Collaborative, noted that disruptions in the food workforce could hurt the economy.

After researching various food stocks, we gathered a list of 20 popular stocks priced under $20. We focused on the top 10 favored by hedge funds as of Q3 2024, using data from Insider Monkey. Our list is arranged by hedge fund interest. The price data is current as of February 14, 2025.

Why pay attention to hedge funds? Research shows that mimicking their best picks can lead to better market performance. Our own quarterly newsletter has achieved a 275% return since May 2014, significantly outpacing benchmarks.

Flowers Foods, Inc. (NYSE:FLO) specializes in packaged bakery products, offering everything from breads to snacks under well-known brands like Wonder and Nature’s Own. The company saw a net income growth of 20.9% in fiscal Q4 2024, reaching $43.1 million, driven by better operating income and effective cost management.

With a strong market strategy and ongoing investments, Flowers Foods expects net sales between $5.403 billion and $5.487 billion for fiscal 2025, reflecting growth of 5.9% to 7.5% compared to the previous year.

Overall, FLO ranks third on our list of best food stocks under $20. While it has potential, we believe AI stocks may offer even greater opportunities for higher returns faster. For those interested, check out more about the cheapest AI stock.

Disclosure: None. This article originally appeared on Insider Monkey.