Does Post Holdings have anything left?
 | By Vlad Skutelnik | Macroaxis Story |
This talk is geared to all Post Holdings leadership as well as to investors considering exiting their position in the firm. I will break down why Post Holdings leadership may should not consider a stake in the firm. Post Holdings current daily volatility is 1.46 percent, with beta of 0.0 and alpha of 0.0 over S&P 500. Post Holdings holds recent Real Value of $100.32 per share. The prevailing price of the company is $103.28. At this time the company appears to be overvalued. Macroaxis determines value of Post Holdings from analyzing the company fundamentals such as Operating Margin of 19.41%, Shares Outstanding of 73.31M and Return On Equity of 7.89% as well as examining its technical indicators and Probability Of Bankruptcy. In general, we support investing in undervalued entities and to dispose of overvalued entities since at some point stocks prices and their ongoing real values will merge together.
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Reviewed by Gabriel Shpitalnik
This firm currently holds 6.56B in liabilities with Debt to Equity (D/E) ratio of 202.2 indicating Post Holdings may have difficulties to generate enough cash to satisfy its financial obligations. The firm dividends can provide a clue to current valuation of the stock. The entity is not expected to issue dividends this year as it trying to preserve or re-invest any of the funds available for distribution to stakeholders. The company has Profit Margin (PM) of 4.15 % which can be a sign that it executes well on its competitive strategies and has a good control over its expenditures. This is normal as compared to the sector avarege. Similarly, it shows Operating Margin (OM) of 19.41 % which suggests for every 100 dollars of sales it generated a net operating income of 0.19. Post Holdings financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Post Holdings, including all of Post Holdings's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Post Holdings assets, the company is considered highly leveraged. Understanding the composition and structure of overall Post Holdings debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.
Understanding Post Total Liabilities
Post Holdings liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Post Holdings has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Post Holdings balance sheet include debt obligations and money owed to different Post Holdings vendors, workers, and loan providers. Below is the chart of Post short long-term liabilities accounts currently reported on its balance sheet. You can use Post Holdings financial leverage analysis tool to get a better grip on understanding its financial positionHow important is Post Holdings's Liquidity
Post Holdings financial leverage refers to using borrowed capital as a funding source to finance Post Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Post Holdings financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Post Holdings' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Post Holdings' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Post Holdings's total debt and its cash.
Another Deeper Perspective
Post Holdings price decrease over the last few months may encourage investors to take a closer look at the company as it closed today at a share price of 103.05 on 449745.000 in trading volume. The company executives were not very successful in positioning the company components to exploit market volatility in May. However, diversifying your holdings with Post Holdings or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.455. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. Post Holdings preserves 202.20% of debt to equity. Post Holdings is trading at 103.28. This is 1.46 percent down. Today lowest is 103.05. Post Holdings Inventory Turnover is comparatively stable at the moment. Moreover, Post Holdings Revenues USD is comparatively stable at the moment. In closing, I belive Post Holdings is currently overvalued. It Ignores market trends and projects below average odds of financial turmoil in the next two years. Our immediate buy-hold-sell recommendation on the firm is Strong Hold.
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