Is Flowers Foods, Inc. (FLO) the Best Buy-the-Dip Stock to Buy Now?

We recently published a list of 11 Best Buy-the-Dip Stocks to Buy Now. In this article, we are going to take a look at where Flowers Foods, Inc. (NYSE:FLO) stands against other best buy-the-dip stocks to buy now.

As volatility rises, AllianceBernstein believes that staying invested remains a strategic priority to capture the long-term return potential in a broadening market. Global equities saw fresh difficulties in Q1 2025 amidst increased trade-war worries and developments in AI. As per the firm, bouts of volatility and a cloudy outlook highlighted the increased importance of diversification, valuations, and company fundamentals.

Realignment of Earnings

As per AllianceBernstein, recent shifts in equity return patterns highlight a deeper look at longer-term earnings trends. Over the previous 15 years, the US corporate earnings growth managed to outpace that of the non-US companies, reflected by the MSCI EAFE Index. The firm believes that, before 2010, this wasn’t always the scenario. Its research demonstrated that in 3 of the 4 decades since 1970, non-US earnings surpassed US earnings. This year, US corporate earnings growth is projected to come closer in line with that of earnings growth of the rest of the world, says AllianceBernstein. At the same time, the equity valuations outside the US remain at a significant discount, considering the 2025 forecast earnings.

Despite a difficult quarter, the firm opines that the US stocks are critical to any diversified allocation. Over the last 60 years, US earnings growth has continued to rise consistently, tackling significant economic and geopolitical shocks. Unshakeable US advantages— which span from innovation to education to corporate culture— form a critical factor for the equity returns. Overall, the firm believes that a US allocation with disciplined active portfolios throughout the style spectrum is the correct way to tap into the dynamic market.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Measures Likely to Help US Stocks

According to BlackRock, the US is home to some renowned and innovative companies. The country remains at the forefront of the AI infrastructure buildout and a frontrunner on the global stage when it comes to both R&D spending and patent applications. IP laws continue to stimulate such an innovative impulse. As per the firm, the US possesses over half the world’s “unicorn” companies. According to them, any moves toward policy targeting deregulation can further accelerate the innovative edge.

These measures contribute to the firm’s positive long-run outlook for US stocks. Over the near term, it anticipates that the market will broaden out. This broadening will take place from “Magnificent 7” leadership to the rest of the US and also to other parts of the world. As per the asset manager, Q1 results can be a teaser. The developed markets, ex-U.S., are expected to lead returns, followed by emerging markets and then value stocks in the U.S.

Our Methodology

To list the 11 Best Buy-the-Dip Stocks to Buy Now, we used a screener to shortlist stocks that trade close to their respective 52-week lows. After getting an extended list of 25-30 stocks, we chose the ones popular among hedge funds. Finally, the stocks are ranked in ascending order of their hedge fund sentiments, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Flowers Foods, Inc. (NYSE:FLO)

Closing Price as on April 28: $17.66

52-week Low: $17.33

Number of Hedge Fund Holders: 30

Flowers Foods, Inc. (NYSE:FLO) is engaged in producing and marketing packaged bakery food products. The company’s strong execution of portfolio strategy and cost savings initiatives fueled its Q4 and FY 2024 adjusted EPS growth amidst the difficult economic environment. In Q4 2024, the company’s diluted EPS rose $0.03 to $0.20, while adjusted diluted EPS went up by $0.02 to $0.22. The company’s investments in innovation and in-store operations resulted in strong market share performance from the leading brands. Improved pricing and the addition of profitable new accounts in the away-from-home business supported Flowers Foods, Inc. (NYSE:FLO)’s margins. Furthermore, a positive mix shift towards higher-margin products in the branded retail also aided its margins.

In FY 2024, Flowers Foods, Inc. (NYSE:FLO)’s net income increased 101% to $248.1 million (demonstrating 4.9% of sales), a 250-basis-point increase, mainly because of increased operating income due to lower legal settlements and related costs, and moderating ingredient costs. However, to a lesser extent, the benefits of optimization and cost savings initiatives also supported the increase. For the 53-week fiscal 2025, Flowers Foods, Inc. (NYSE:FLO) expects net sales of ~$5.403 billion to $5.487 billion, demonstrating 5.9% – 7.5% growth as compared to the prior year.

Palm Valley Capital Management, an investment management firm, released its Q1 2025 investor letter. Here is what the fund said:

“We started four new positions in the first quarter: Forrester Research (ticker: FORR), Monro (ticker: MNRO), Reynolds Consumer Products (ticker: REYN), and Flowers Foods, Inc. (NYSE:FLO). Each of these is a relatively small weighting in the Fund. Flowers Foods is the second largest producer of bread and bakery foods in the United States. Founded in 1919, the company’s brands include Nature’s Own, Dave’s Killer Bread, and Wonder. Flowers Foods has a long history of generating consistent sales and profit growth. As the company integrates its recent Simple Mills acquisition, earnings are expected to be flat in 2025. Nevertheless, we believe Flowers will continue to generate abundant free cash flow, sufficiently funding its dividend (5.0% current yield) and its plan to reduce debt. With Flower’s stock trading at a five-year low, its valuation has improved considerably.”

Overall, FLO ranks 8th on our list of best buy-the-dip stocks to buy now. While we acknowledge the potential of FLO as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than FLO but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.