Unconventional Capital Wisdom
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Post Holdings: Great 'Cereal' Acquirer Meaningfully Undervalued

Post Holdings (NYSE:POST) might at first glance be easy to pass on. It derives a large portion of cash flow from the ready to eat cereal business in a secular decline and is executing what might look like an incoherent acquisition strategy in the "healthy" packaged food space. Investors who quickly dismiss the company are passing up on an unconventional public company acting like a private equity firm. You get to have one of history's top capital allocators, albeit he's getting older, without having to pay large private equity fees. Post Holdings' rare philosophy is clearly conveyed by the following statement from their 2013 annual report:

"Post Holdings competes for your capital allocation. To earn it we must...
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