Trade-Ideas LLC identified

Post Holdings

(

POST

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Post Holdings as such a stock due to the following factors:

  • POST has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.6 million.
  • POST has traded 2.1 million shares today.
  • POST traded in a range 235.8% of the normal price range with a price range of $5.62.
  • POST traded below its daily resistance level (quality: 53 days, meaning that the stock is crossing a resistance level set by the last 53 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on POST:

Post Holdings, Inc. manufactures, markets, and sells refrigerated, active nutrition, and private label food products in the United States and Canada. The company operates through five segments: Post Foods, Michael Foods, Active Nutrition, Private Brands, and Attune Foods. Currently there are 3 analysts that rate Post Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Post Holdings has been 1.1 million shares per day over the past 30 days. Post has a market cap of $3.7 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of -0.37 and a short float of 15.3% with 5.96 days to cover. Shares are up 46.5% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Post Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • POST's very impressive revenue growth greatly exceeded the industry average of 9.0%. Since the same quarter one year prior, revenues leaped by 91.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 135.86% and other important driving factors, this stock has surged by 101.86% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, POST should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 168.4% when compared to the same quarter one year prior, rising from -$35.10 million to $24.00 million.
  • Net operating cash flow has significantly increased by 84.46% to $103.30 million when compared to the same quarter last year. In addition, POST HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 8.54%.
  • POST HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, POST HOLDINGS INC swung to a loss, reporting -$7.60 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.68 versus -$7.60).

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