Imperial Brands Share Discussion Threads

[fenners66] 28/9/2022 12:46

Will be offset presumably to some extent by buying in tobacco in US $

Guess overall its the mix of profit how much is earned abroad that matters

[fenners66] 28/9/2022 12:44

Gabster X - "headwind"

You mean Tailwind , its going to help , not hinder

[spud] 28/9/2022 11:16

My largest holding (thank goodness).

Fags may well kill people, but they're a lifesaver for my portfolio!

spud

[tuftymatt] 28/9/2022 10:33

Shows what a safe haven this one is to be just under 1900.
If I was to buy anything today it would be here and BAT.

[philanderer] 28/9/2022 10:02

Credit Suisse reinitiates Imperial Brands with 'outperform' - price target 2550 pence,

[tuftymatt] 20/9/2022 09:53

A circa 10% increase is a positive and realistic move in these uncertain times for the wider equity market I think.

[philanderer] 20/9/2022 09:43

SocGen raises Imperial Brands price target to 2,175 (1,985) pence - 'buy

[spud] 17/9/2022 23:17

Yes. Looking for a £25 target for 2023. spud

[valuehurts] 17/9/2022 18:47

Doesn't really look like that much selling pressure. The stock is grinding higher. ESG is starting to fall out of favour and any fund that changed to an ESG mandate sold years ago. Good quality owners now. Performance will bring more buying in over time. If we have sharp sell off people sell etfs and the etf will be forced to sell. People on margin will also sell anything liquid if they get a margin call. The big sale pressure previously was from Woodford and pals and funds converting to ESG mandates but that has now stopped as far as I can see.

[jrphoenixw2] 17/9/2022 13:38

Fenners: 'if a fund is say overweight in a particular stock , maybe 10% + and it has grown to greater than its rules split of fund capital or if there has been a large fund withdrawal , death , big pension withdrawal , loss of a mandate etc....'

Interesting point. You could add 'or to provide cover as institutional investors increasingly respond to pressures to offload in order to align with the values of contemporary ESG investing'.

[action] 17/9/2022 11:53

BOD IS CHUMS WITH MM .No shareholders int at heart.What you just said is true but FD of company do not inderstand simple logic.

[fenners66] 15/9/2022 10:32

I just saw a post on another board -

"I can only assume we have a seller of a large position here as I cannot understand why it should be underperforming the mkt in such a way"

Made me think more about the need for institutions to have liquidity and therefore buybacks.


It does not matter what the large cap stock is , or what its prospects are , if a fund is say overweight in a particular stock , maybe 10% + and it has grown to greater than its rules split of fund capital
or if there has been a large fund withdrawal , death , big pension withdrawal , loss of a mandate etc....

then the fund may need to sell regardless of the company's prospects, share price , underlying performance or whatever.

The decision to withdraw cash from the fund is entirely divorced (I guess) in some cases from the investment decision for the fund.

So knowing that the company is providing a buyback giving the fund an orderly exit - even if the fund manager didn't want to - gives some opportunity for planning that withdrawal.

In the end the insti's hold the cards and whether good or bad for the business it does not matter , what matters is what's good for them.

[fenners66] 12/9/2022 12:46

"returning cash to shareholders " BS

Like saying that borrowing £10m to pay off a failed CEO as he walks out the door;

is "looking after all our stakeholders and ensuring our employees are valued and are rewarded"

Then claiming that by paying the next CEO 3% less its good for profits.....

[spud] 11/9/2022 18:09

I’ve given up trying to reason with bb fanatics fenners. Companies are in thrall to the large IIs who in turn push for bb’s so as to facilitate the liquidity of overweight Long positions.

I’m not even going to explain why Companies are so pro bb’s. I guess everyone is sick of hearing. But what really rankles is their claim of returning cash to shareholders via bb’s.

spud

[fenners66] 11/9/2022 16:31

"This will mean you get higher dividends in future."
So they effectively increased the debt by £1.5 bn but that is rolling into higher interest rates now.

The advocates of buybacks don't often mention Enterprise Value (EV)

That is the value of the business amounts to the value of the equity + debt

Some I have read on advfn - wrongly think that because its a maths equation - adding debt adds to the value of the company - it does not.

Think of enterprise value as a set of scales
On the one side you have the business, sum of future cash flows or future profits discounted
vs
Debt and equity.

So if you replace shares (equity ) by debt it reduces the enterprise value devoted to equity, increase the amount devoted to debt but the balance is similar, except for ....

Meanwhile the added interest cost reduces future profits and cash flows and so can reduce the EV.


Back to the higher dividends in the future comment

What the F is wrong with paying the £1.5 bn in higher dividends in the present ?
Why should share holders have today's jam to be spent on making non-shareholders in the hope of
jam by the next blue moon ?

At £35 a share the existing shareholders could have had 30p a year for 5 years instead

I have done many calculations on companies with buybacks and the "justification" of higher future dividends is
garbage.
It amounts to a few % rise in EPS , which when DPS is always less than the increase in EPS - means the actual potential gain to each future dividend is sweet FA

I have calculated in lots of cases this miniscule increase would take around 20 years to reflect the cash spent on buybacks instead of dividends now.

What does that mean to a load of us ?
We'll be dead before we ever see it.

[valuehurts] 10/9/2022 23:43

Buying back shares at too high a price while increasing debt and increasing the dividend is exactly why the share price bombed. However the situation is now very different. As I mentioned before they can both reduce debt and do accretive buybacks. This will mean you get higher dividends in future.

[spud] 10/9/2022 23:33

They bought back shares to the value of £1.5 billion when they were about £35. They ran out of money to continue and the price dipped to about £12. Today it's about £19. Also, due to squandering the money on buybacks, they had to cut the dividend by about 30%. If that's a good use of available resources, then I'm a Dutchman with a black eye. Stefan. Reduce the debt and then reduce the debt some more. spud

[valuehurts] 10/9/2022 23:08

It doesn't matter how big or small a company is to make a share buyback effective it depends on the NPV of the shares and the % amount of shares being bought back. Luckily the company will start buying back shares albeit a bit late in my opinion. They have plenty of cash flows to continue reducing debt as well, this will mean a steadily increasing dividend and hopefully higher share price. My target is £30 iwithin 2 years.

[valuehurts] 10/9/2022 22:59

A consolidation does not change anything other than the price of the share. A 2 for 1 share consolidation simply means that instead of 2 shares of example £1 each you have 1 share of £2. The amount of ownership in the company stays the same and you get the same amount of dividend but on a consolidated basis. A buyback reduces the overall amount of shares and lifts the remaining holders equity in the company.

[djderry] 10/9/2022 10:03

I was thinking the same scobank.This board seems to be the exception to the rule.You are having a reasoned debate about the merits of different approaches without all the trolling and personal jibes.It's quite refreshing.

[scobak] 10/9/2022 09:16

I am impressed with the way in which this board is used. It is possible to discuss thoughts and ideas without the bitterness and nastiness which seems to occur so frequently. I am not saying that I am 100% correct and appreciate the informed comments of other contributors. This is all part of our continued learning.
Thanks to all.