E Post Holdings, Inc. - Chew Slowly

Post Holdings, Inc. (POST) is manufacturer, marketer and distributor of branded ready-to-eat cereals in the United States, Canada and Europe, marketing products under the brand names, Honey Bunches of Oats®, Pebbles™, Post Selects®, Great Grains®, Spoon Size® Shredded Wheat, Post® Raisin Bran, Grape-Nuts®, Good Mornings® and Honeycomb®. Industry peers include General Mills, Inc, Kellogg Company, and Pepsico, Inc.

Short-Term Value

My short-term (3-6 week hold) target price for the stock is $83.61, with an initial trailing stop at $80.77. Upward price movement will find no resistance. Downward price movement will find support at $80.88 and $79.69, with final support at $77.63.

Days to Cover

The most recent days to cover number is 5. The days to cover number is a measurement of the company’s outstanding shares that are currently shorted, expressed as the number of days required to close out all the short positions. The number is determined by dividing the number of outstanding shares currently shorted by the average daily volume.

The Tax Act

The Tax Cuts and Jobs Act of 2017 makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) requiring companies to pay a one-time deemed repatriation transition tax (the “Transition Tax”) on certain earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; (5) eliminating the corporate alternative minimum tax (“AMT”) and changing how AMT credits can be realized; (6) capital expensing; (7) eliminating the deduction on U.S. manufacturing activities; and (8) creating new limitations on deductible interest expense and executive compensation.

The Securities Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) 118 which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete.

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Disclosure: I hold shares of Post Holdings, Inc.

Disclaimer: I am an individual investor not licensed or registered with any government or institutional financial agency.

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Comments

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Alpha Stockman 1 week ago Member's comment

I keep reading that the big cereal companies are suffering from ever declining sales. Their answer is to keep acquiring companies that are eating into their market share. But where does this end? Perhaps it is time for them to rethink breakfast and come up with some new ideas on their own. Like produce their own cereal bars (I believe only Quaker does this) or come up with healthier alternatives. $POST

Danny Straus 1 week ago Member's comment

Or more than just breakfast. I for one often enjoy cereal for multiple meals of the day! Not the healthiest option, but quick, easy, filling and tasty!