#Tag57, provided BATS are inside their 2.0-2.5 net debt to EBITDA, the business is functioning as it should generating FCF with excess cash, I see debt coming down as the NGP investment phase reduces.. |
How can any of the cash on hand be considered excess when BATS is carrying a lot of debt? |
I bet Reeves if she still there, will tax tobacco to the hilt, March budget try to get some money in, UK gilts yield 5.4% incredible. |
#Fenners66, interesting views, perhaps excess cash generated here at BATS is easier to define, we know the stick sales business volumes are in decline so we cannot reverse and grow this and we are already ploughing cash into NGP growth, the RnD centre is having a big makeover (thanks #Tri Harder for this snippet)..
We also know the ITC hotel disposal is going to leave us with 15% of that business, this is non core, so could well be up for disposal with that excess cash to be returned to shareholders through further BB or dividends..
See IF we can break the 3000 pence barrier this week, but round numbers do seem to take a few runs at to get through and close over, but the company is still buying so it should just be a matter of time..
All considered, happy to hold here and wait.. :o) |
 Listened to a Buffett lecture the other day.
He is often cited as a great supporter of BB's.
However he actually said stuff like ...
Buy back shares out of Excess cash. Once you have done everything else you can with it to
boost profit.
Only buyback the shares when they are below intrinsic value - we know that most could not
correctly assess intrinsic value.
Then be patient wait for the right time and stop when share price climbs beyond your range.
Seems to me that the reason BB's go wrong is that BOD ignore all these sensible comments
and just "do BB's "
First Excess cash - not excess debt availability - so many BB's are done with borrowed funds
BH is sat on a massive pile of cash $200-300Bn at the moment but they are not splurging it all
on BB's as WB knows when the market falls he may want to use that on some serious investments
Intrinsic value and patient - BB's are decided in advance sometimes up to a year in advance
like "next year we are going to spend £1bn on buybacks and put this in the hands of independents
so we don't use our skill and judgement at all.
WB says BH does not use investment bankers and outside advisors to spend their cash.
How can setting a BB in advance get it right ?
That's without a massive pile of other arguments I have been into many times before about
BB's |
#anhar... precisely, That's why no one can say whether share buy backs supports a share price or not.
What's obvious is the company "think" the shares are cheap to buy them up, rather than invest the money elsewhere in the company. Time will tell if they are correct. |
That question cannot be answered. But having been investing for decades I have seen far too many shares indulging in bbs whose share prices have fallen or gone nowhere, though you might claim it would be even worse without the bbs.
I don't see how it can't be proven either way whether bbs benefit share prices but I as see it, the information is all public so that the institutions who will be the sellers are waiting to dump some stock into the bb. There's no surprise element to spike the price. So I think the eagerness with which many small investors welcome bbs is misplaced imo. |
#anhar "buybacks do not support the share price" So without BAT buying back it's own shares recently, Where would the share price be today? |
#LLB Forgot to say, Good entry point to get into BAT, My advice if possible just keep re investing the dividend.
The power of compound interest is amazing!
Especially with Bat renowned for keeping the dividend hign. |
A couple of classic small investor misguided beliefs here.
1. 3,000 or any round number is irrelevant, so that going above this means nothing and is no more significant than 2,999 or 3,001. It just sounds nice to some people but the big investors who make the market do not care at all about round number prices.
2. Buybacks do not support the share price. They may have other benefits to investors but supporting the price is not one of them. |
#LLB Yes I agree, with the buy backs it will underpin the share price for the next few years.
Bat management are well aware they need growth in their NGP, The market wants to see growth to counter the decline in the stick market, then I feel it will be reflected in the share price.
The changes being implemented at Southampton are meant to excelerate all this. Time will tell 🤞 |
#Tri Harder, good luck with the RKH position, they have come a long way since I was in there in 2008, we know what happened next back then.. :o)
I have waited for years to build my BATS position having held IMB for many years, the opportunity came recently in H1-2024 after the US asset value right down, the highs of over 5000 pence in 2016/2017 are very interesting to look back on, now with many buybacks reducing the share capital, we will see how far it gets back towards those highs with the new NGP revenue drivers.. |
#LLB, Yes we keep trying to break thru 3000, it will happen, you probably find when it does it push on alot further, we are to cheap compared to other tobacco companies in my opinion.
Wish I had a sold a few when they touched 5000 a few years ago, my finger hovered over the sell button..lol
Don't live far from Salisbury and went along to Rockhoppers agm a few years ago, Nine people turned up, so had plenty of time to grill the CEO Sam Moody, from there after alot of research slowly built up a sizable holding, it's my only aim risky share, own BP and some Harbour Energy also, mainly for the dividend.But got a feeling the Rock will come good 🤞 |
#Tri Harder, free shares and some at -20%, fill your boots, I can see why you might be top heavy BATS.. :o), well done..
OT, but 15 years ago I was into some OnG plays down near the Falklands RKH, FOGL, BOR, did alright but elected to stick to producers than explorers, many things can go wrong IF they drill a duster so maybe top slice your winner and roll with the free carry to mitigate the risk..
Looks like 3000 pence here will have to wait a while longer, the US jobs date was robust today, meaning interest rates could stay higher for longer.. |
@ LLB, Yes they have a employee share scheme, 20% below market price taken out for three or five years, also they get several thousand pounds a year in free shares.
Some in issa account, but to be honest I've been putting my Rockhoper exploration shares into my issa the last several years, (price increase will definitely be higher in % terms..up 300% in the last six months.)
It's a aim stock, but got lots going for it, do some research, if Navitas get the funding together this will end up multiples of today's price! Yea we just keep compounding the BAT dividend, Overweight really, but difficult to find a safe secure dividend. |
>>LLB - could there be some benefit in asking advfn about the bot idea? After all, it's pointless to tick everything as it distorts real opinion. I've forgotten the address for complaints, but it might be worth a try as it is now commonplace on many threads.
pete
EDIT: Just been on LGEN and LIO - same thing happening there. |
#Tri Harder, good stuff, do they have an employee share scheme she can qualify for where you can buy at a discount..? and/or stuff them in the ISA and just let the compound build them for you.. :o) |
#Laurence Llewellyn Binliner, Yes definitely, I have a feeling today's the day BAT cracks 3000, if not then I won't be long, it's a £30+ share all-day long.
Wife works at BAT Southampton R@D, certainly lots going on to get their new generation products to market, hence the plans for a centre of excellence build/refurb this year. |
#Tri Harder, we suspect it is a bot, some sad individual has found the time and wasted it to do some programming, what a clown..
BATS, another run at 3000 pence today..? |
Out of curiosity, Who's the clown who ticks every post down? |
Redbaron10 @ Correct, no Manufacturing in the UK since they closed the Southampton plant. Several thousand people still work there,R@D only, in fact it's to become there centre of excellence for R@D worldwide, So a big build/ refurb on it's way |
redbaron - agreed
US$ earners are likely to be much more valuable to us over the next few years. |
Are we building up the courage for another blast at 3000? |
GBp/USd under 1.23 now.Added cost pressures continue with the employer NI rises affecting defensive UK retailers, who employ a lot of people, denting their share prices, helping to buoy other defensive plays like BAT.I'm not sure if BAT has any manufacturing facilities in the UK now, but most employees are employed overseas. |
BAT the single-largest shareholder in ITC, will hold 15.3% stake in the hotel company after the de-merger. This will make BAT the second largest shareholder in the hospitality company after the ITC holding of 40%..
#Cameo4, thanks for sharing, I had it down as a 10% holding but BAT own more shares than I thought.. :o), still likely to be divested on completion by the look of it as it is non core, but we will have to wait and see how it pans out.. |
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