Flowers Foods (NYSE:FLO) recent downgrades and pending lawsuit make the company a bargain at current levels due its long-term growth potential and key acquisitions. Flowers Foods Inc. is currently the second largest bakery company in U.S.

To maintain the company’s strong competitive advantage, Flowers Foods acquired two organic and natural bread producers: Dave’s Killer Bread for $275 million and Alpine Valley Bread for $120 million, at the end of 2015. According to IRI data, the US organic bread market has grown at 27% annually over past four years and continues to see strong growth. The company knows that organic is the future and these two acquisitions signal its plans to ramp up its organic bread business, and has absorbed more costs in order to do so. Alpine Valley Bread and Dave’s Killer Bread have both generated an amazing compound average revenue growth rate of 51% and 32% respectively over last three years. The acquisitions are expected to provide Flowers Foods with high-quality & high-margin products to boost its sustainable revenue stream significantly in the long term.

Flowers Foods operates under two segments: Direct Store Delivery (DSD) and Warehouse segments. The Direct Store Delivery segment handles several bakery items to a network of independent distributors, accounted for 84% of sales with higher profit margin; Warehouse delivers frozen snack cakes, breads, rolls, buns directly to customers’ warehouses, stands at 16% of total sales. Since 2008, Flowers Foods has continued to expand its market share by acquisitions and stretching the current territory. Nature’s Own bread ranked first of branded bread sold in US, with $838.7 million of sales in 2015.

Flowers Foods main competitor is Bimbo Bakeries USA, an American corporate arm of Mexico Group Bimbo (OTCPK:GRBMF). Group Bimbo is the world’s largest bakery company. Currently, Flowers Foods achieved 14.7% of bakery market share, while Bimbo Bakeries USA accounted for 33.8% market share.