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Post Holdings (POST) Announces New Share Buyback Program

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Post Holdings, Inc. (POST - Free Report) announced a new share repurchase authorization worth $300 million, beginning Sep 3, 2022. As of Sep 2, 2022, Post Holdings bought back nearly $354 million under the earlier $400 million share repurchase authorization.

We believe the move reinforces the company’s confidence in its business model and long-term growth opportunities. Certainly, Post Holdings is committed to boosting shareholders’ value. Shares of the Zacks Rank #3 (Hold) company have increased 7.6% in the past three months against the industry’s 1% decline.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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What Else Should You Know?

Post Holdings is benefiting from a recovery in the Foodservice business. During third-quarter fiscal 2022, foodservice sales increased 33.1% to $579 million. Volumes rose 6.2% owing to the increased away-from-home egg and potato demand. Egg volumes rose 7.2% and potato volumes rallied 8.5%.

Post Holdings strategically increased its presence through acquisitions. The company’s fiscal third-quarter top line included $128.1 million of net sales from acquisitions. These acquisitions include the Lacka Foods Limited, a Private label ready-to-eat (PL RTE) cereal business, the Egg Beaters liquid egg brand, the Almark Foods business and related assets and the Peter Pan nut butter brand.

On Apr 5, 2022, Post Holdings acquired Lacka Foods Limited. Lacka Foods is a U.K.-based marketer of high-protein, ready-to-drink (RTD) shakes under the UFIT brand. Post Holdings acquired Almark Foods on Feb 1, 2021. Almark, renowned for its hard-cooked and deviled egg products, provides conventional, organic and cage-free products. On Jan 25, Post Holdings acquired the Peter Pan peanut butter brand. The Peter Pan peanut butter is one of the leading brands that cater to a diversified customer base in key channels.

Other Food Players Gaining on Buyouts

Several other companies in the food space, like The Kraft Heinz Company (KHC - Free Report) , Hormel Foods Corporation (HRL - Free Report) and McCormick & Company, Incorporated (MKC - Free Report) , are benefiting from acquisitions.

In April 2022, Kraft Heinz acquired a majority stake in a Brazil-based condiments and sauces company — Companhia Hemmer Indústria e Comércio (Hemmer). The buyout will widen Kraft Heinz's International Taste Elevation platform and enhance its presence across emerging markets. In January 2022, KHC acquired an 85% stake in Germany-based Just Spices GmbH (Just Spices). The buyout enhances its direct-to-consumer operations and go-to-market expansion.

Hormel Foods is strengthening its business through strategic acquisitions. In June, HRL acquired the Planters snacking portfolio from Kraft Heinz. Prior to this, it acquired Texas-based pit-smoked meats company Sadler's Smokehouse in March 2020. The buyout is in sync with Hormel Foods’ initiatives to strengthen its position in the foodservice space.

McCormick strategically increased its presence through acquisitions, strengthening its portfolio. In December 2020, MKC bought a 100% stake in FONA International, LLC and some of its affiliates. FONA’s diverse portfolio helps McCormick bolster its value-add offerings and expand the flavor solutions segment into attractive categories. In November 2020, McCormick acquired the parent company of Cholula Hot Sauce — a premium Mexico-based hot sauce brand.

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