Post Holdings, Inc. (POST): A Bull Case Theory

We came across a bullish thesis on Post Holdings, Inc. on Valueinvestorsclub.com by Pluto. In this article, we will summarize the bulls’ thesis on POST. Post Holdings, Inc.'s share was trading at $101.29 as of February 2nd. POST’s trailing P/E was 17.93 according to Yahoo Finance.

Post Holdings, Inc. operates as a consumer packaged goods holding company in the United States and internationally. POST stands out as an overlooked opportunity: a ~$5 billion market-cap consumer staples company with a long track record of value creation, best-in-class capital allocation, and more than 10% insider ownership.

Since its 2012 spin-off, Post has compounded revenues and cash flows at high-teens rates and delivered a 13.4% stock CAGR, outperforming peers despite operating in mature categories. Today, however, it trades near historical valuation troughs at ~8.8x EV/EBITDA versus an 11.7x average, and at a highly attractive forward free cash flow multiple.

Post operates a diversified portfolio across branded cereals, pet food, foodservice egg and potato products, refrigerated retail, and the U.K.-based Weetabix business, generating stable cash flows that support an owner-operator capital allocation mindset.

Chairman William Stiritz and CEO Robert Vitale—both deeply invested alongside shareholders—have consistently applied a disciplined playbook centered on opportunistic M&A, divestitures, leverage optimization, and aggressive buybacks when valuations are compelling. This approach has produced standout outcomes in the past, most notably the BellRing Brands spin-off, which generated outsized, tax-efficient returns.

Looking ahead, free cash flow is set to inflect as elevated capex normalizes, tax savings accrue, and buybacks materially shrink the share count. Even assuming modest EBITDA growth, Post could generate cash equivalent to a large portion of its market cap over the next five years, supporting low- to mid-teens IRRs. With multiple company-specific catalysts and a valuation well below historical norms, Post Holdings offers a compelling risk-reward profile despite broader market skepticism toward mid-cap consumer staples.

Previously, we covered a bullish thesis on PepsiCo, Inc. (PEP) by Kroker Equity Research in October 2024, which highlighted strong pricing power, a diversified food and beverage portfolio, and resilient cash flows supporting dividends and buybacks. PEP’s stock price has depreciated by approximately 11.21% since our coverage due to valuation compression. Pluto shares a similar view but emphasizes capital allocation discipline and free cash flow-driven rerating potential at Post Holdings.

Post Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held POST at the end of the third quarter which was 36 in the previous quarter. While we acknowledge the potential of POST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.