Japan Post Holdings to cut stake in Japan Post Bank
Financials
The sell-down is driven by Japan Post Holdings needing to reduce its holding to 50% or lower by Mar 26. Periscope Analytics expects to see a buyback to support the stock. The last sell-down in Mar 23 was double the size and the stock held up relatively well post the announcement. There will be passive buying from global trackers at the time of settlement of the shares. Together with the buyback, around 23-25% of the offering could be bought up in the short-term. In addition, Passive TSE Tokyo Price Index TOPIX (TPX INDEX) trackers will need to buy ~80m shares though the buying could come only in Jan 26. Japan Post Bank has underperformed its peers over the last couple of years and by a lot. This offering removes the overhang.
Edition: 206
- 07 March, 2025
Consumer Staples
POST’s last Qtr saw pricing up $231m vs inflation costs up $157m adding 86-cents to EPS of $1.08. Much is egg-related. After Easter, eggs have fallen to $1.62/dozen from $5.33 in late Dec. BTN expects pricing to drop. Earnings are also helped by cutting marketing as competitors are spending more. POST is a roll-up story but its borrowing costs on new money is 8-9% and even with pricing ROI is ~6%. BTN estimates a 5% ROI on the latest pet food deal. Net debt is 5.1x forecast EBITDA and that assumes all this pricing holds. Losing $100m of pricing that exceeds inflation would push debt close to 6x EBITDA.
Edition: 159
- 28 April, 2023
Six companies at risk of inventory-related 1Q'22 misses
The current macro environment is bringing to the forefront the importance of the different impacts that the various inventory accounting methods have on company results during times of inflation. BTN have noticed several companies whose inventory levels have declined which may have shielded them from the full impact of rising costs. Meanwhile, their revenues have benefitted from aggressive price hikes. They believe this may be setting the stage for earnings disappointments in 1Q and 2Q 2022. Companies highlighted General Mills, The Coca-Cola Co, The Hershey Co, Post Holdings, Ball Corp, and Mondelez International.
Edition: 131
- 18 March, 2022