Is Post Holdings Inc (POST) Going to Burn These Hedge Funds?

Post Holdings Inc (NYSE:POST) was in 15 hedge funds’ portfolio at the end of the first quarter of 2013. POST has seen a decrease in activity from the world’s largest hedge funds of late. There were 19 hedge funds in our database with POST positions at the end of the previous quarter.

To most market participants, hedge funds are viewed as slow, old financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey look at the elite of this group, around 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by monitoring their best picks, we have found a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as important, bullish insider trading activity is a second way to break down the financial markets. There are plenty of incentives for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

Keeping this in mind, we’re going to take a look at the latest action surrounding Post Holdings Inc (NYSE:POST).

Hedge fund activity in Post Holdings Inc (NYSE:POST)

In preparation for this quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of -21% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, John Paulson’s Paulson & Co had the biggest position in Post Holdings Inc (NYSE:POST), worth close to $52.8 million, accounting for 0.3% of its total 13F portfolio. On Paulson & Co’s heels is Jonathon Jacobson of Highfields Capital Management, with a $51.1 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other peers that hold long positions include James Crichton and Adam Weiss’s Scout Capital Management, Mario Gabelli’s GAMCO Investors and Phill Gross and Robert Atchinson’s Adage Capital Management.

Judging by the fact that Post Holdings Inc (NYSE:POST) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedgies that decided to sell off their positions entirely last quarter. At the top of the heap, Larry Foley and Paul Farrell’s Bronson Point Partners said goodbye to the largest position of the 450+ funds we monitor, worth close to $12 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund dumped about $2.6 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds last quarter.

What do corporate executives and insiders think about Post Holdings Inc (NYSE:POST)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Post Holdings Inc (NYSE:POST) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Post Holdings Inc (NYSE:POST). These stocks are The WhiteWave Foods Co (NYSE:WWAV), Lancaster Colony Corp. (NASDAQ:LANC), Dole Food Company, Inc. (NYSE:DOLE), Cal-Maine Foods Inc (NASDAQ:CALM), and Sanderson Farms, Inc. (NASDAQ:SAFM). This group of stocks are in the food – major diversified industry and their market caps are closest to POST’s market cap.

With the returns demonstrated by Insider Monkey’s studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Post Holdings Inc (NYSE:POST) is an important part of this process.

Click here to learn why you should track hedge funds