POST (POST HOLDINGS)
- P/E: 127.4
- GAAP DILUTED Y-O-Y GROWTH LAST QUARTER: $1.07
- SECTOR: CONSUMER NON-DURABLES
- ASSETS-LIABILITIES: 148
- DIVIDEND: NONE
Although famous primarily for its
cereal, Post is rapidly expanding its business. Utilizing
cost-cutting techniques in combination with the innovation of popular
products, the company experienced exponential growth in its most
recent quarter. Post has an opportunity to grow in competition with
other US cereal leaders Kellogg, and General Mills.
Post has only 1 cereal in the top 10
best-selling cold cereals and 2 in the top 10 best-selling warm
cereals, and produces less than half the revenue of Kellogg last
year. However, Post is diversifying its product base with the
introduction of Premier Protein, and the expansion of its Dymatize
protein powder. Dymatize is a leading brand in the whey protein
market geared towards bodybuilders, while Premier Protein is marketed
to casual fitness enthusiasts. Post also owns a successful brand of
cage free egg whites. Consequently, Post is experiencing sales
growth in the burgeoning low-fat protein supplement market. Post
acquired weetabix, which will substantially increase its market share
and profit in the cereal market. However, weetabix is an established
brand and not a newer, growing brand.
For the most recent quarter, the
company delivered a 2% reduction in costs, while still delivering an
increase in revenue. Consequently, the company's Active Nutrition
segment increased over 200% in profit, while its primary Post segment
increased just under 30% in profit. The company's Michael Foods
Group declined due to market conditions and a lack of expansion in
the segment.
Post has an excellent
assets-liabilities ratio, giving it the opportunity to innovate even
further than it has already with its on-hand cash. The company has
an extremely high P/E currently calculated at 127.4, but boasts a
forward P/E of only 26.8 according to Gurufocus. Its solid track
record of earnings growth, developed brand presence, and innovation
have lead to steady growth since its low of 58 in 1/2016.
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