The packaged goods sector – think of names such as The Hershey Company (NYSE: HSY), General Mills (NYSE: GIS), Campbell Soup Company (NYSE: CPB) and The J.M. Smucker Company (NYSE: SJM) – has lagged the S&P 500 since 2018, gaining only 20% versus the S&P’s gain of 60%.

But now that everything on Wall Street has gotten so expensive, underperformance in the packaged goods sector could finally equate to an underappreciated value play.

In my view, the best way to play both growth and value at the same time comes from Hostess Brands (Nasdaq: TWNK).

As I’m sure you know, this company dates back to 1919, when the Hostess CupCake was introduced to the public. That was then followed by Twinkies in 1930.

Remember these on grocery store shelves?

In the years that followed, Hostess expanded into brands that include Ding Dongs, Ho Hos, Donettes, Zingers and Fruit Pies.

But here’s what I find interesting…

Many investors don’t realize that Hostess is a public company.

It came out of bankruptcy in 2013 and went public three years later.

Hostess has leveraged its brand recognition by offering a wide assortment of new flavors and varieties, such as banana creme and blueberry creme Twinkies.

And right now, Hostess is an under-the-radar recovery story.

Trading at 18 times 2021 projections, it’s one of the fastest-growing food companies, with sales growth at 4% and earnings per share growth at 10%.

This is why J.P. Morgan has given it an “Overweight” rating and a $20 price target.

Action Plan: As a value play that’s also experiencing the strongest growth within the packaged goods sector, Hostess Brands is a “Buy” at current levels.

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