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

Core Thesis - Post Holdings, Inc. is viewed as an overlooked investment opportunity with a market capitalization of approximately $5 billion, showcasing a strong history of value creation and capital allocation [3][4]. Financial Performance - Since its 2012 spin-off, Post has achieved high-teens revenue and cash flow growth, with a 13.4% compound annual growth rate (CAGR) in stock performance, outperforming peers in mature categories [4][6]. - The company currently trades at a valuation trough of approximately 8.8x EV/EBITDA, compared to an average of 11.7x, indicating a potentially attractive investment opportunity [4][7]. Business Operations - Post operates a diversified portfolio that includes branded cereals, pet food, foodservice egg and potato products, and the U.K.-based Weetabix business, which generates stable cash flows [5][6]. - The leadership team, including Chairman William Stiritz and CEO Robert Vitale, has a strong alignment with shareholders and employs a disciplined approach to capital allocation, focusing on M&A, divestitures, and share buybacks [6][7]. Future Outlook - Free cash flow is expected to increase as capital expenditures normalize and tax savings are realized, with potential cash generation equivalent to a significant portion of its market cap over the next five years [7]. - The company is positioned to achieve low- to mid-teens internal rates of return (IRRs) due to company-specific catalysts and a valuation that is well below historical norms [7].