Post Holdings (POST) Weak On High Volume Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Post Holdings ( POST) as a weak on high relative volume 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 $40.8 million.
  • POST has traded 97,966 shares today.
  • POST is trading at 5.81 times the normal volume for the stock at this time of day.
  • POST is trading at a new low 5.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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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 is 1 analyst that rates Post Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Post Holdings has been 536,000 shares per day over the past 30 days. Post has a market cap of $2.8 billion and is part of the consumer goods sector and food & beverage industry. The stock has a beta of 0.47 and a short float of 22.7% with 10.15 days to cover. Shares are up 22.4% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Post Holdings as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:
  • POST's very impressive revenue growth greatly exceeded the industry average of 10.3%. Since the same quarter one year prior, revenues leaped by 140.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 266.7% when compared to the same quarter one year prior, rising from -$18.30 million to $30.50 million.
  • 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 (-$0.47 versus -$7.60).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Food Products industry and the overall market, POST HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for POST HOLDINGS INC is currently lower than what is desirable, coming in at 28.97%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.89% trails that of the industry average.

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