 Why are people worried about British American Tobacco the company?
Maybe it is the decreasing market share of Cigarettes in Western markets. This is primarily caused by changing social habits and regulations impacting market share. It seems British American Tobacco has seen this and acted with the Impairment of its USA acquisition in 2017. The impairment is based on 30 years at around £700 million yearly by calculations.
In the meantime, British American Tobacco has turned a profit in its smokeless category in 2023 beating its forecast by 2 years. It has put aside £150 million in Canada towards Cannabis. This is covering your bases if legalized in the coming years in the USA on a larger scale.
Its portfolio across the world seems to be gaining more traction in Africa and India. ITC in India recently overtook BAT on a market cap basis. British American Tobacco owns 25.3% after reducing its position and using the proceeds for Buybacks in 2024/25. In November 2024 ITC Hotels will float and BAT own 17% of the proceeds from the sale will reduce debt and more Buybacks in 2026/27.
British America Tobacco's EBITDA is above 10% which is a good omen going forward. The debt was reduced by £3 Billion in 2023 with a similar outlook through 2024/25. BAT is cash-generative which puts it in a position to move into other markets. This it has done in the past with Argos, Kohl, and Dillard's just to mention a few.
ITC India is a good example of how BATS can diversify into other markets quickly. In the present climate, BATS in the coming years will remain cash generative with Dividend payments covered for the next 2 years or more. With debt coming down, interest rates look likely to fall in the coming 12 months. It may seem Seeking Alpha has the correct outlook for Bats.
Happy Investing |
#Salver2, interesting, most are aware of the Menthol cigarettes issue, and the potential ban/overturn, but maybe not the scale, quite a result for BATS as the impact would have been significant..
Long here, and built a position since Nov/Dec, looks cracking value for 2300 and the 10% income, planning on holding for a decade and see where we are at the end with the compounding DRIP.. :o) |
Nellynell
Probably this one...
"”Altria's market share woes warrant attention”"
Daniel Jones has a history of getting things wrong tho |
Anyone whose short BAT will be caned Monday morning as the ban on menthol cigarettes will not be going ahead in USA - Bats largest market is USA and half of their cigarette sales are menthol |
What article? They just reported at the top end of estimates? |
Reading article about altria and alarm bells are starting to go off in my mind
I have never regretted giving up smoking but think I might have doubts holding here
Dividend keeps me onside at moment but will be watching very carefully as the article has raised doubts
Might be a storm in a teacup but assuming my favourite place for the moment |
Who's left to sell, that is the mystery. Surely everyone that wanted to sell is out already! |
In regards to buybacks, the company not wishing to affect the share price too much lets them get those shares cheaply so they buy more shares and save more on dividend payments in the long term, this is one interpretation anyway lol |
If the doesn't like like the logic of the buy back it simple marks the price down.It's the forces of the market that manipulate the share price.. Down we go atm |
If I understand BB's correctly, they are done on average weighted volumes, so as not to have too significant an impact on daily price movements. Otherwise, you could really manipulate the price. Even in a stock of this size. |
Any one know the logic behind the drop in buyback to 210 thousand from the previous 280/300 thousand when the buyback started.
Or am I fretting about nothing more than an adjustment to spin the buyback out for a longer period.
Would be a sensible move in light of the haphazard machinations in the market
Hopefully share price will pick up as we near dividend being paid at beginning of May. |
For my sins i acquired some more here at 2351p.My rationale being PM came out with good results concerning their non-combustibles product growth for Q1,gbp/usd is lower and PM is close to a 52 week high for its share price BATS is far closer to its 52 week low than it is to its 52 week high.Also buy backs should in theory put some floor price under the share price around this level.The UK government vote on prohibiting 18 year olds from smoking is also behind us now as a distraction/drag for the share price Plus the ftse100 is on a roll at the moment. Well that's my thinking anyway.More of the 10% yield is quite some compensation if i'm proved wrong.The risk/reward as a value investment looks compelling.I thought the same was true at £29-£30 so i feel i have to keep adding at these levels when i have the funds available. |
An accumulation sideways trend is consolidation until it moves in a direction atm it's in a bear flag consolidation so it probably will be down but like I said who knows?? |
Not sure myself. I mean it could be, but not nailed on yet IMO. I think we are simply range bound until the next update, but obviously if we finish below the 50 and we get confirmation over the next couple of days, then your spot will be right.
I have been toying with the idea of buying a few for a side pot trade, but it 'felt' like we wanted to go lower (back at 2250), so I held off.
10% dividend though, so worse potential value traps for a trade, especially if the BOD keep doing the basics right, which should eventually see us trading back a good deal higher than 23 quid anyway, IMO. |
#Mcunliffe1, that was the logic yes, but in reality how many ISA holders are there in the UK that have already maxed out their limit, and can go another +5..?
1M holders would direct GBP5BN into the UK listings, significant yes, the FTSE100 has a 2TR valuation so it would add just 0.2%, and that is is if it all went into the main market listings which is small change in reality..
Better to make the London market more investible with consistent fiscal policy, lower interest rates, corporation tax breaks for investing in your own business and encouraging SME instead of penalising them by withdrawing tax breaks for company directors.. Grrrr, Brexit has not helped at all, but we wont mention that.. :o) |
I suspect because JH wants to attempt to 'direct' that extra £5k to UK stocks rather than elsewhere in the world. |
Final batch waiting dividend income here too, 80% complete and 20% to go, the price does not matter so much now with the majority of the position built.. :o)
Why did JH not just raise the ISA allowance this year to GBP25K instead of pi55ing about with an extra layer of complexity for an additional 5K allowance subject to a review, which is not expected to add anything until July if approved.. |
Ok thanks everybody
As I said until them dividends start making an appearance my hands are tied
Thanks again |
You could equally argue for it to be an accumulation pattern. |
On the daily chart it's range bound atm I class it to be trading in a bear flagBut charts can deceive?? |
What's a bear flag please
I don t think its what I want to hear at least not until dividend is paid into my account.
Bereft of funds at moment. |
This seems to be in a large bear flag time will tell?? Anyone's guess |
Apart from GLEN. |
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