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A Look at Post Holdings’ Performance in Fiscal 3Q16

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Price movement

Post Holdings (POST) fell by 2.8% to close at $84.27 per share during the first week of August 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -2.8%, -0.71%, and 36.6%, respectively, as of August 5.

POST is trading 2.7% below its 20-day moving average, 3.7% above its 50-day moving average, and 20.5% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Mid Core ETF (JKG) invests 0.34% of its holdings in Post Holdings. The ETF tracks a market cap–weighted index of US mid-cap companies that exhibit both growth and value characteristics as determined by multifactor selection. The YTD price movement of JKG was 10.3% on August 5.

The market caps of Post Holdings’ competitors are as follows:

  • Kellogg Company (K) — $29.0 billion
  • TreeHouse Foods (THS) — $5.6 billion
  • B&G Foods (BGS) — $2.8 billion

Post Holdings’ results for fiscal 3Q16

Post Holdings reported fiscal 3Q16 net sales of $1.3 billion, a rise of 3.3% compared to its net sales of $1.2 billion in fiscal 3Q15. Net sales of Post’s consumer, active nutrition, and private brands rose by 21.7%, 1.5%, and 0.88%, respectively, and net sales of its Michael Foods Group fell by 8.3% in fiscal 3Q16 compared to fiscal 3Q15.

The company’s gross profit margin and operating profit rose by 22.4% and 74.7%, respectively, in fiscal 3Q16 compared to the prior year’s period. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $231.0 million in fiscal 3Q16, a rise of 23.2% compared to fiscal 3Q15.

Its net income and EPS (earnings per share) fell to $0.0 million and $0.0, respectively, in fiscal 3Q16, compared to $19.8 million and $0.33, respectively, in fiscal 3Q15. It reported adjusted EPS of $0.62 in fiscal 3Q16, compared to $0.27 in fiscal 3Q15.

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POST’s cash and cash equivalents and inventories rose by 22.8% and 9.3%, respectively, in fiscal 3Q16 compared to fiscal 4Q15. Its current ratio rose to 3.2x, and its debt-to-equity ratio fell to 2.06x in fiscal 3Q16, compared to its current and debt-to-equity ratios of 2.9x and 2.10x, respectively, in fiscal 4Q15.

Projections

The company has made the following projections for fiscal 2016:

  • adjusted EBITDA in the range of $915 million–$925 million
  • capital expenditure in the range of $135 million–$145 million, including ~$15 million related to integration activities and ~$15 million related to growth activities
  • maintenance capital expenditure in the range of $105 million–$115 million

Now we’ll look at B&G Foods’ dividend.

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