Bill Stiritz is probably the most successful insider buyer I have come across in over 20 years of watching executives trade their own shares. The best representation of this may be his large open market purchases of Ball Corp (BLL) in the late-1990’s and early-2000’s. He put a ton of money into the stock back then and investors who followed his lead are now sitting on a 20-bagger.
Recently, I noticed he bought a bit more Post Holdings (POST) where he serves as Non-Executive Chairman. This is not a huge purchase for him by any stretch but I’m encouraged that it is accompanied by purchases on behalf of executives like the CEO and CFO.
The stock is on the cheaper end of its valuation spectrum currently. At 13.24 times free cash flow, the stock essentially carries a 7.5% free cash flow yield.
Consumer staples stocks like Post have been decidedly out of favor over the past few years as investors have gravitated to higher-risk consumer discretionary, cyclicals and information technology stocks. But we are very late in the current cycle and this preference could shift quickly, especially if the recent weakness in the broader markets continues.
Technically, the stock just completed a DeMark Sequential 9-13-9 buy signal on the daily chart and is reversing higher on cue.
This also comes as the stock just tested the clear support provided by the bottom of its trading range over the past few years. It’s far too soon to make any assumptions but a break out above the upper trend line would forecast a target of nearly $110, or almost 50% above the current price.
All told, this looks like a stock I’d be happy to hold in the current late-cycle environment, especially if it’s hedged against general market risk (as is everything I own currently).