Hostess Brands Inc. (TWNK) Stock: Should Investors Follow These Insider Trades?

Hostess Brands Inc. (NASDAQ:TWNK) saw a downside of -0.65% to close Monday at $18.42 after subtracting -$0.12 on the day. The 5-day average trading volume is 2,809,220 shares of the company’s common stock. It has gained $18.90 in the past week. An average of 1,674,170 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,222,948.

TWNK’s 1-month performance is 14.41% or $2.32 on its low of $15.86 reached on 09/14/21. The company’s shares have touched a 52-week low of $12.48 and high of $18.73, with the stock’s rally to the 52-week high happening on 10/11/21. YTD, TWNK has achieved 25.82% or $3.78. However, the current price is down -1.66%% from the 52-week high price.


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Insider Transactions

On Jun 04, 130 days have gone by since the last insider trading activity for Hostess Brands Inc. (TWNK). Jacobs Andrew Wilson (See Remarks) most recently sold 166,797 shares at $15.96 per share on Jun 04. This transaction cost the insider $2,662,714., Hostess CDM Co-Invest, LLC, sold 3,215,817 shares at a price of $13.50 on Nov 23. Then, on Nov 11, Hostess CDM Co-Invest, LLC sold 50,000 shares at a price of $13.74 per share. This transaction amounted to $687,240.

Valuation Metrics

The company’s PE ratio for the last five years has touched a high of 51.75 and a low of 4.523. TWNK stock has a beta of 0.68. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 2.21 while the price-to-book (PB) in the most recent quarter is 1.44, with the price to cash flow ratio at 17.32.

Hostess Brands Inc.’s quick ratio for the period ended June 29 was 2.10, with the current ratio over the same period at 2.30 meaning that TWNK stock is able to fulfill its debt obligations. As well, the company’s long term debt to equity for the quarter ending June 29 was 0.66, while the total debt to equity was 0.67. In terms of profitability, the gross margin trailing 12 months is 36.10%. The trailing 12-month EBITDA margin is 23.73% while for the period ending June 29; Hostess Brands Inc.’s operating margin was 17.30%. The firm’s gross profit as reported stood at $355.64 million against revenue of $1.02 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Analysts expected TWNK to announce $0.21 per share in earnings in its latest quarter, but it posted $0.23, representing a 9.50% surprise. EBITDA for the quarter stood at more than $66.28 million. TWNK stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 1.74 billion, with total debt at $1.13 billion. Shareholders hold equity totaling $130.09 million

Technical Picture

Let’s look briefly at Hostess Brands Inc. (TWNK) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 11 October was 77.40% to suggest the stock is trending Overbought, with historical volatility in this time period at 17.92%.

The stock’s 5-day moving average is $18.29, reflecting a +4.54% or $0.80 change from its current price. TWNK is currently trading +14.77% above its 20-day SMA, +16.95% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 and SMA200 by +14.48% and +30.55% respectively.

Stochastic %K and %D was 86.73% and 89.61% and the average true range (ATR) pointed at 0.41. The RSI (14) points at 74.47%, while the 14-day stochastic is at 75.13% with the period’s ATR at 0.39. The stock’s 9-day MACD Oscillator is pointing at 0.48 and 0.75 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Hostess Brands Inc. (NASDAQ: TWNK), Morgan Stanley upgraded it to an Overweight rating. They previously had an Equal-weight rating on the stock. Analysts offering their rating for TWNK stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate TWNK as a “sell,”, while 3 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 0 rates the stock as overweight while 7 have offered a “buy” rating.

What is TWNK’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $17.00 and a high of $22.00, with their median price target at $20.00. Looking at these predictions, the average price target given by analysts is for Hostess Brands Inc. (TWNK) stock is $19.63.

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