British American Tobacco Share Discussion Threads

[this_time_its_different] 19/9/2018 22:28

If anything it should rise since the guy causing the ship to crash is resigning, but you never know with this market.

[unnavailable] 19/9/2018 21:45

Ceo stepping down. Share price battered tomorrow?.

[this_time_its_different] 19/9/2018 14:38

No one buys BATS to get rich, but they do expect their capital to not be destroyed. This is not like me investing in a fintech stock or cannabis stock, where yes, 50% drops are expected in a recession.

[this_time_its_different] 19/9/2018 14:36

step, it's just ridiculous to see a defensive stock drop so much outside of a recession. It's just absolute fear, what is worrying is no one is saying anything. I haven't heard anything from the board of BATS. So are we not undervalued now? Even with sterling on the floor, we trade for £35??

[stepone68] 19/9/2018 14:32

ttid, I think you are fixated on that £55 figure. At that price BATS was over-valued. Buy them now if you want the income - not for capital appreciation.

[this_time_its_different] 19/9/2018 14:30

With a weak £, BATS should be trading around £42-£45

[this_time_its_different] 19/9/2018 14:27

£ is weak right now. What the hell happens to BATS once the pound hits 1.5, will BATS end up at £29. I mean seriously, is that not a crazy destruction of capital, from £55 to £29, you may as well have p-i-s-s-e-d the money up the wall.

[philanderer] 19/9/2018 14:23

Well I Don't know what the hell's going on now...


BBC business...We told you earlier how the pound broke above $1.32, well it's made a dramatic reversal, falling (briefly) below $1.31.

It fell after a Times report said that Prime Minister Theresa May had rejected an improved offer on the Irish border from Brussels Brexit negotiator Michel Barnier.




And Barclays reiterating 'overweight' this morning. 🤓🤓🤓

[philanderer] 19/9/2018 14:00

I'm getting a great income from these but my capital is being eroded big time 😛😛

Strong £ today causing the drop apparently

[this_time_its_different] 19/9/2018 13:43

What the management need to do is raise the divi by 10%. A higher yield will automatically attract buyers. I know a rising risk free rate will push everything up the security market line, but there aren't many stable 6.5% dividends out there.

[this_time_its_different] 19/9/2018 13:36

Assuming a 7-10% divi increase year on year, we will have a dividend of 8% in 3-4 years.

[stepone68] 19/9/2018 13:22

ttid - where do you get your forecast yield from? The forecast dividend for next year is 202p which is 5.7% yield. And the P/E is forecast to be about 12. Neither of those things make it extremely good value, and since growth is likely to be limited, I reckon BATS is priced about right. I am still happy to hold and collect divis though.

StepOne

[this_time_its_different] 19/9/2018 13:12

Rates are not going to rise fast, the rises will be slow and gradual. I can bet you my house the BOE is not going to raise again this year and is looking at a max of one raise the next year (and so, probably after Brexit with a good economy). In 3-4 years, yes, bond proxies could be a problem for NEW investors. We will be getting close to 8% at least in 3-4 years time, which a government bond or even non junk corporate bond is not going to give.

If the BOE was aggressively raising rates, I would be more worried, but they are not. Carney is in office till 2020 and he is a low rates guy.

[steeplejack] 19/9/2018 12:48

Everybody appreciates what you are saying.Up until the recent price fall,with dividends reinvested,BATs had risen around 15x since 2004.Lucky old income funds who naturally purchased the stock due to its obvious yield premium and enjoyed massive capital gain.Running an income fund must be one of the most lucrative,overpaid jobs in existence since a simple calculation of yield dictates investment criteria (once you've established cash flow of course).What concerns me about BATs is the rating,ignore yield for a second .Rising bond yields have already spiked the guns of a number of bond proxy equities of which BATs is one.I have concerns about BATs because I have concerns about the equity market in addition to believing that tobacco competitive and regulatory pressures are ever increasing.Your observation about percentages and population growth is very valid though!

[this_time_its_different] 19/9/2018 10:29

This is an addictive product with immense cash flow, it's not going away overnight, especially in EM markets where there is little advertising regulation or health warnings. You get money for food and ciggies, it's always been this way in EM markets. The market is overlooking all of this and is very wrong, the next earnings report and divi rise, will make everyone who buys now a lot of money. BATS will yield 6.5% next year with the divi rise. STRONG BUY

[this_time_its_different] 19/9/2018 10:22

Cigarettes are addictive, that means you have great pricing power. Tobacco has been the most profitable business over the last 100 years, what makes you think anything is going to change. Populations rise, 15% of the current brazil population is higher than 34% of the 1989 brazil population. Smokers are rising in EM markets, the stock is a strong buy.

[steeplejack] 19/9/2018 10:10

BRAZIL. Smoking prevalence has come down in the past two decades from 34% of the adult population in 1989 to 15% last year (2009)according to the Brazilian Ministry of Health. But the declining trend has tailed off over the past few years as tobacco companies target new consumers, notably women. So,the truth is,Brazil has a smoking profile not dissimilar to the UK.Recently,very stringent anti smoking legislation has been passed.In some states like San Paulo,smoking anywhere in public is illegal and subject to a fine.We may as well deal with the facts.

[thanksamillion] 19/9/2018 09:54

TTID

Can you let this board know when you finally give up on BATS, I would see such a change in sentiment as a classic BUY signal.

No offence intended, just my lighthearted jesting.

TAM

[this_time_its_different] 19/9/2018 09:38

Celebrities still openly smoke, it's cool to smoke, always has been and always will be. BATS need to target Vape fast in developed markets and focus on sticks in emerging markets.

[this_time_its_different] 19/9/2018 09:37

Never seen such fear in a stock, from £55 to £35, brokers were rating this a strong buy at £55 and now rate it a strong sell at £35. Something isn't right. This company produces an addictive product that has growing demand in EM markets. People in Indonesia smoke like chimneys, the stock is extremely undervalued.

STRONG BUY

[this_time_its_different] 19/9/2018 09:31

The market is forgetting BATS has growing businesses in EM markets, people in Indonesia and Brazil smoke like chimneys. Stock price is too cheap, STRONG BUY

[steeplejack] 19/9/2018 09:27

Years ago,the tobacco industry benefited from a sort of free advertising with celebrities all openly smoking.Then there were Hollywood films like Now Voyager that luxuriated in the smoking habit.This all helped.The younger generation are not subject to this peer pressure.Its not cool to smoke.The middle classes have made a concerted effort to quit.Going to the gym isn't synonymous with vaping!The lower classes have a greater tendency to smoke rather in the same way as they play slot machines.Smoking vapes make people look like complete prats.Moreover,the instrumentation is not cheap anymore than cigarettes are cheap.The UK government like many other western governments have curbed smoking through prohibitive taxation.This policy isn't going to end.

[philanderer] 18/9/2018 17:26

Market report..

British American Tobacco retreated as Morgan Stanley started the stock at 'equalweight' and said that while it should be a 'buy' at the current discount valuation, a combination of new challenges and familiar ones leave the bank on the sidelines.

"There are three lingering clouds casting a long shadow over BAT, the cash compounder: i) new regulation ii) self-disruption and iii) new entrants," MS said.

[philanderer] 18/9/2018 17:07

DZ Bank upgrading from SELL to HOLD.....target price 3650p

[philanderer] 18/9/2018 09:28

Morgan Stanley starts coverage with EQUAL WEIGHT and target price of 3920p