In this article we will check out the progression of hedge fund sentiment towards Post Holdings Inc (NYSE:POST) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Post Holdings Inc (NYSE:POST) going to take off soon? The smart money was turning less bullish. The number of bullish hedge fund bets dropped by 4 in recent months. Post Holdings Inc (NYSE:POST) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that POST isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 31 hedge funds in our database with POST positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s check out the key hedge fund action encompassing Post Holdings Inc (NYSE:POST).
Jeffrey Tannenbaum of Fir Tree
Do Hedge Funds Think POST Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards POST over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Post Holdings Inc (NYSE:POST) was held by Route One Investment Company, which reported holding $771.2 million worth of stock at the end of September. It was followed by Sachem Head Capital with a $160 million position. Other investors bullish on the company included Iridian Asset Management, AREX Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position AREX Capital Management allocated the biggest weight to Post Holdings Inc (NYSE:POST), around 31.79% of its 13F portfolio. Route One Investment Company is also relatively very bullish on the stock, designating 19.85 percent of its 13F equity portfolio to POST.
Judging by the fact that Post Holdings Inc (NYSE:POST) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers that decided to sell off their entire stakes heading into Q4. Interestingly, Matthew Stadelman’s Diamond Hill Capital dropped the biggest investment of the 750 funds tracked by Insider Monkey, valued at close to $188.1 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $23.3 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Post Holdings Inc (NYSE:POST). These stocks are Macy’s, Inc. (NYSE:M), Casey’s General Stores, Inc. (NASDAQ:CASY), Voya Financial Inc (NYSE:VOYA), Woori Financial Group Inc. (NYSE:WF), Chart Industries, Inc. (NASDAQ:GTLS), BlackLine, Inc. (NASDAQ:BL), and Nielsen Holdings plc (NYSE:NLSN). This group of stocks’ market valuations match POST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| M | 41 | 1478930 | 6 |
| CASY | 22 | 211044 | -2 |
| VOYA | 35 | 968117 | -9 |
| WF | 2 | 3608 | 0 |
| GTLS | 22 | 350268 | -5 |
| BL | 18 | 326955 | -2 |
| NLSN | 24 | 1476397 | -4 |
| Average | 23.4 | 687903 | -2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $688 million. That figure was $1434 million in POST’s case. Macy’s, Inc. (NYSE:M) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 2 bullish hedge fund positions. Post Holdings Inc (NYSE:POST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for POST is 51.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately POST wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on POST were disappointed as the stock returned -8.6% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Post Holdings Inc. (NYSE:POST)
Follow Post Holdings Inc. (NYSE:POST)
Suggested Articles:
Disclosure: None. This article was originally published at Insider Monkey.
