British American Tobacco Share Discussion Threads

[this_time_its_different] 23/11/2018 15:25

Bats always trades on a lower multiple because of regulation risk. No industry is prone to dying overnight like tobacco, I dont see the point of a menthol ban, you might as well ban cigs at this rate and be done with the slow death(excuse the pun)

[philanderer] 23/11/2018 14:03

BATS, LLOY and VOD holding my lot together today so far.

[stewart64] 22/11/2018 19:33

Thanks for the explanation re. Reynolds. Doesn't look like great business taking on an extra 49 billion of debt to achieve a tiny gain in profits. I note Eps was 2.854 in 2017 and was 2.744annualised for H1 2018 but may fall once we have H2. Still could come in at a fwd. p/e of around 9.

Looks to me like they booked a 30 billion profit on their existing Reynolds holding based on the takeover price they paid to buy up the rest, which improves the balance sheet?

[this_time_its_different] 22/11/2018 18:44

This stock is trading very strange, the price is at 2011 levels now, this is more than a pull back, it's an absolute collapse in share price, which can only be achieved if future earnings are going to be severely dented. People are saying BATS is a strong buy now, but we haven't seen a bottom yet or retest of lows.

[this_time_its_different] 22/11/2018 18:07

BATS bought out the remainder of Reynolds American, which hint hint has the leading menthol brand (newport) in the US.

[stewart64] 22/11/2018 18:04

Having another look at these shares as a potential buy. Bit puzzled by the balance sheet action last year. Intangibles got bigged up from 12 billion to 117 billion meaning the impressive price to book of one is entirely derived on intangibles at twice Market cap. Anybody know what the cause of this was, presumably acquisitions?

[this_time_its_different] 22/11/2018 11:30

Though Brexit being smooth, Fed stopping rate hikes and no more trade w-a-r will calm the markets and would lead to a rise in BATS share price regardless. The key test will be getting brexit through the UK parliament and the next FOMC meeting. IF both are successful, I see all stocks rallying....this includes BATS.

[this_time_its_different] 22/11/2018 11:25

The problem is the FDA and their a-ttac-k on tobacco, the FDA commissioner is only in post till the president resigns or is removed from office. So most likely trump loses in 2020 and Scott Gottlieb is out. This could be the saving grace for BATS. As the commissioner pretty much dictates policy at the FDA.

[this_time_its_different] 22/11/2018 11:18

Like I said, if sterling rises more and more pressure will be put on BATS.

[philanderer] 22/11/2018 10:47

Menthol Ban Leaves Tobacco Stocks Undervalued

[action] 22/11/2018 10:03

This keeps going down like centrica. anyone expecting to see £20-£22.?

[pugugly] 21/11/2018 11:37

CC: Nice one - reminds me a bit of home made beer making before it was legalised

[creditcrunchies] 20/11/2018 20:46

seeing a stock drop -50% in a few months on a plan from the FDA that cannot ban cigarettes because it does not have the power to do so. All they can do is tinker with tobacco flavours, vape flavours, and nicotine reduction which will only be applicable after big tobacco takes the FDA through the courts and lobbying powerful politicians over many years. The FDA do not have the science to force a lot of these changes through meanwhile multi billion $ profits will just keep on flowing. If this goes to £20 you'll be getting forward yields over 10% in dividends on a forward PE under 8.

The problem with the FDA is they are creating a market to get around restrictions which they won't have any authority to control anymore because it'll be a black market. I've managed to get around most of the EU vape restrictions with over sized tanks, making my own liquids. Some people even make their own mixes and sell them between themselves all of this does is take it out of regulation the same market still exists except before it was controlled as it went through a retail network with guidelines and consumer laws. The menthol vapes are easily made you get a large bottle of VG base liquid (from the food industry), some nicotine shots to mix in with the base then add 10% food flavourings (from the food industry) - menthol, mint etc voila you've got unregulated menthol vape liquid with nicotine. The mixing recipes are all over the internet including the fruit flavours they are trying to ban also. At the moment though it's easier to buy off of the shelf regulated liquids because like most people can't be bothered they want it ready mixed.

[ohojim] 20/11/2018 15:34

I be taking some comfort that ftse dropping but BATS still flying (Jim looks for wood to touch)

[creditcrunchies] 20/11/2018 15:30

Everything looks oversold at the moment the FTSE just keeps dropping

[ohojim] 20/11/2018 12:16

Well it looks oversold, 2700 seems vaguely supportive and there's a gap to be filled so I have just dipped my toe in for a swing trade, which may well turn into an investment but I fancy the odds either way.

[creditcrunchies] 19/11/2018 19:08

I might load up some more when we get closer to the next ex-div date end of Dec 2018 we'll see but the FTSE looks like it's in a bear market at the moment that's the only worry

[philanderer] 19/11/2018 10:05

Johann Rupert’s Reinet won’t kick tobacco habit

[creditcrunchies] 17/11/2018 20:04

Big tobacco lining up to fight FDA through the courts over ban:
Big Tobacco prepares to fight proposed ban on menthol cigarettes


But Big Tobacco is gearing up for a fight on menthol, a far more important product to the industry’s incumbents. Altria called the proposed menthol ban “extreme”. BAT said: “The science today does not support treating them differently from other cigarettes.”

BATS are currently priced on a forward dividend yield of 7.72% and a forward PE ratio of 8.65

[creditcrunchies] 17/11/2018 19:29

Looking at the press release from BATS it gives the impression that they will take the FDA to court just by the way that they state the FDA has to provide scientific facts on their ruling. It looks to me like BATS have the facts ready and prepared already to take legal action against the FDA. I found this site that tracks these cases:





If you read into it more it means the FDA will make a ruling, big tobacco will take the FDA to court that the actual goal of achieving the menthol bans and the forced nicotine reduction levels in tobacco cigarettes will take up to 10 years to enforce

This section is interesting:
" It had been a topic of discussion at the American Medical Association in the mid-1990s. Congress gave the FDA regulatory authority over tobacco in 2009 with the Family Smoking Prevention and Tobacco Control Act of 2009 (“Tobacco Control Act”). It prohibited the agency from banning cigarettes or from banning nicotine. The law does, however, explicitly allow for the potential reduction of nicotine in cigarettes to any level above zero. "

[creditcrunchies] 17/11/2018 18:07

Well we are getting into rally season soon so there will be an opportunity to trim down some exposure on the riskier stocks

[philanderer] 16/11/2018 21:00

2690p close stateside

DJI +117 pts

[essentialinvestor] 16/11/2018 17:45

CC, have you tried the Alan Carr method?.

I was seriously addicted, chain smoker at one point,
gave up using that method. 15 years ago now.

[deadly nightshade] 16/11/2018 17:42

i was in my local newsagents the other day and bumped into a guy who was using his tablet and restocking the tobacco orders. being a holder of bats and imb shares i asked him if tobacco sales are on the decline. when we got chatting it turned out he works for imperial brands and he said sales are booming and the slump in tobacco shares are totally over done, he said that the potential of emerging markets is massive and thats not even taking into account vaping. add on the fact you can count on one hand the amount of big tobacco makers its not something where you have lots of competition. plus he said the market caps of imb and bats they can afford to buy out any competition coming from new vaping start ups. all in all he was very positive. my other local newsagents was telling me they take 18000 pound a week in tobacco sales so i think these scare storys are way over done