Imperial Brands Share Discussion Threads

[minerve 2] 17/5/2020 16:21

Ref hernando:

Bogdan Branislov is a regular commentator on The Telegraph and sometimes on ADVFN too. I do have time for him because he does know quite a bit about accountancy. No disrespect to him but he was bullish on Costain, Countryside properties and Morgan Sindall not long back. Costain subsequently came out with a surprise rights issue and builders quality of earnings are poor - not because of size but because they are extremely cyclical.

This is where I think Bogdan gets too concerned about the NAV of this stock. The earnings here are extremely stable (compared to most other stocks). They are so stable that IMO they even beat other defensives in times like this that depend on government spend.

Because they are very stable and because they generate great cash flows means that an investor can concern himself a little less about the Net Asset Value. Imperial Brands has been trading on negative retained assets for along time and Phillip Morris International has been trading on a negative NAV also for a long time. The argument here is whether the company is in a position to reduce or pay off its debt - if it wished to. Imperial brands obviously can and smoking numbers world wide aren't going anywhere fast.

Whether the dividend is sustainable or not is irrelevant to me as an investor. What matters is free cash flow to equity. This company has it in spades relative to its share price. So whether it chooses to pay it as a dividend or pay off debt or execute share buybacks (at the right price/conditions) will benefit the investor. Of course, what the company chooses to do may effect the share price but if you are a long-term investor you are generally - if management are good - going to win unless smoking world-wide drops off a cliff. Fat chance of that with all the stress.

The company generates loads of positive cash flow. That is the reality.

[32campomar] 17/5/2020 14:53

Very positive write up in the Sunday telegraph, surprised only a hold and not a buy nevertheless nice to read ahead of results

[hernando2] 17/5/2020 14:10

Read the comment below the article...very interesting regarding the make up of the balance sheet..the chap who wrote it is a regular commentator on the telegraph and seems to know his onions

[minerve 2] 17/5/2020 12:19

You have to laugh at "hold". With the levels of Free Cash Flow to the Firm against the current share price this is currently showing and as long as the new CE allocates capital well you don't need a growing top line for this to be a superb investment.

[metis20] 17/5/2020 11:00

fwiw IMB is a hold for James Ashton in the Telegraph's Questor today

[spud] 15/5/2020 14:09

Interesting.....spud

[32campomar] 15/5/2020 07:34

Imperial Brands' Dividend Yield Is Too Cheap To Ignore Even With Pessimistic Growth Assumptions https://seekingalpha.com/article/4346320-imperial-brands-dividend-yield-is-too-cheap-to-ignore-even-pessimistic-growth-assumptions

[spud] 14/5/2020 16:12

When was it ever thus...

spud

[lendmeafiver] 14/5/2020 16:10

Yes I had another nibble in the 1560s, it’s all just follow the DOW at the moment.

[32campomar] 14/5/2020 13:54

Picked up a few here at 1568 ahead of results next week

[zztop] 13/5/2020 08:49

Is it true that the vape illness last year was the start of covid and nothing to do with the product?

[creditcrunchies] 13/5/2020 08:33

nicotine is highly addictive so the medical community certainly wouldn't want to encourage people to take it because it's effective at controlling Covid-19 infections. As soon as these research papers came out with the findings they were all kiboshed by the WHO and Public Health England

[pete160] 13/5/2020 06:53

If they cut the divi at IMB the shares would be crucified (even more than they have been) and surely an activist investor would push for a sale or break up of the whole thing?

[fenners66] 12/5/2020 10:37

Agreed , should be the owners benefit , the management already get paid handsomely at no risk , if they fail they get paid off and walk away rich, meanwhile the owners take the pain.

However we know the BOD will most likely do what they like and the institutions that hold these shares on our behalf will not give a fig.

[minerve 2] 12/5/2020 10:21

There is absolutely no reason to cut the dividend unless the return on NGP is great enough to direct capital there rather than to shareholders. OR he could choose to pay the debt down or continue buybacks.

What I want to see is nothing silly. No immediate pandering to ego. Empire building for the sake of it or earnings growth off the back of diminishing returns (ROE/ROCE). All decisions made should be to the benefit of the owners and not to his or other director remuneration gains. I'll be looking at his incentives closely.

[dcarn] 11/5/2020 22:09

It's going to be set at the interims next Tuesday.

I personally think / hope they'll keep the next two interim payments of 31.28p and let the new man decide for the finals.

or

He may instruct them to do a BT :-).

[ladywormer] 11/5/2020 17:32

Next dividend due to be paid 30 June so has to be set before the new broom steps in

[gabsterx] 11/5/2020 11:17

Cannabis legalization could be an opportunity for big tobacco, I'm sure the government will want this to be sold through proper regulated channels (and tax the hell out of it), could see a nice 10-20% boost in earnings if this materializes.

hxxps://www.proactiveinvestors.co.uk/companies/news/918738/cannabis-legalisation-will-be-a-likely-response-to-the-uks-upcoming-desperation-for-tax-revenue-with-concomitant-opportunities-for-investors-918738.html

[dcarn] 10/5/2020 17:38

Just click 'Financials' tab at top of page and you get all details.