Imperial Brands Share Discussion Threads

[fenners66] 12/12/2022 18:14

spud - re the BAT and almost every other buyback , it comes down to the question

Which do you want

a slightly larger share of (no more shares in though) a worse performing business
or
a slightly lower share of (no less shares though) a better performing business.

Whilst these anal-ysts can point to the EPS metric (and hope)

Everyone else who looks at the fundamentals for the business to buy in new - i.e. where the real momentum for share price growth comes from - has the fundamental choice...

are you more likely to buy the

worse performing
or
better performing business ?

Put that simple its a no-brainer but so many don't get it.

[action] 12/12/2022 13:51

Juul to pay $1.7B to settle law suit.

[ramellous] 08/12/2022 13:43

Take a look at Supreme. (SUP) Their vaping supply business is growing strongly.

[lendmeafiver] 08/12/2022 13:39

Agree, in my view the company will regret not just focusing on debt reduction only, especially given IMBs main profit areas are in cash strapped Europe.

[spud] 08/12/2022 11:35

BAT notes that its sizeable debt position will come with elevated net finance costs due to high interest rates and the strength of the US dollar, but expects strong cash performance for the year.

Should have reduced debt instead of reducing share count.

spud

[philanderer] 08/12/2022 11:29

Down on the read across from BATS this morning

[philanderer] 07/12/2022 00:02

spud, I'm getting old and forgetful ;-)

[lendmeafiver] 06/12/2022 18:23

www.bbc.co.uk/news/uk-63873747

news.sky.com/story/lowest-proportion-of-uk-smokers-on-record-with-vaping-playing-major-role-in-drop-12762843

[spud] 25/11/2022 11:31

Phil - You omitted the fwiw caveat....

spud

[philanderer] 25/11/2022 10:48

Deutsche Bank raises Imperial Brands price target to 2,325 (2,250) pence - 'buy'

[tornado12] 24/11/2022 16:36

Added a few today , also see this holding up well into 2023 with well covered dividend. Recession is here and impact not yet clear, so defensive stocks are important protection in my portfolio. My guess is this will continue throughout 2023 unless a big change in Russian conflict GLA

[tuftymatt] 24/11/2022 12:05

I agree and will add on any dip south of 2050.

That should get me circa 7%pa and the chance of some share price upside too.
Good luck all 👍🏻

[marktime1231] 24/11/2022 11:41

This is par. A 30p surge yesterday and a 49p ex-div followed by an 80p drop. Yes we should expect to rise in to the next ex-div.

The price is rising and the dividend will begin to increase meaningfully from a high start. So we are all happy then.

[tuftymatt] 24/11/2022 09:17

Yes that's right and we are now currently off by 80 so have dipped a bit further.

[spud] 24/11/2022 09:16

Always seems overdone on ex dividend day, even taking costs, ptm and Stamp into consideration. Should recover lost ground next week unless the Market's wheels drop off.spud

[saltaire111] 24/11/2022 09:02

I think the divi’s 49p?

[tuftymatt] 24/11/2022 08:03

A positive start on x divi day 👍🏻

[tuftymatt] 24/11/2022 07:28

Some great posts on here yesterday 👍🏻

Good luck all and with the markets in general looking positive right now lets hope for an open that keeps us north of 2130.

[fenners66] 23/11/2022 23:16

Wunderbar

Perhaps investors have differing views of what they would like from a share , because of investing style or because of the price of entry points.

You want your break even point to be achieved and despite acknowledging you have not really lost your invested funds thanks to dividends , I guess it feels like a loss because of the other opportunities lost. Also the reduction in dividend since you first bought in ?

But then you want out?

Others have bought in much lower down arguably investing for income. So whilst the shares are rising in value, the now rising again dividend is more important if they are hoping to keep the shares for the long term.

Whenever I buy a share for the yield , its nice to see the share rise (always feels better to be on the right side) but its not the gains I specifically target its the yield.

Although a much higher price means the shares could be sold and recycled into something else, when shares are rising it often means the yields are dropping elsewhere and finding the right alternative is harder.

Buying a yield that you think is sustainable is the aim.


So buy a share at a good yield and if it works out hold it.
If the share rises it means lower yield on dividend reinvestment.

If these get to 2400 where else would the funds go?

I don't know where you get the idea that people were expecting large dividend increases this year - the company made it clear that was never going to happen.
Next year after a 5% buyback should be different 6.5% or better should be where it is.

However the buyback does not guarantee that.

£1 bn off the highest costing debt would be enough to deliver more than 2.4 times the flagged increase in dividends through post tax finance cost savings instead.

How much lower would the overall future debt renewals be at lower leverage?

Also less debt adds value to the shares , as the enterprise value shifts from debt to share capital.

So our aims are different - you want a higher price so you can get out.
I want a higher dividend which pays me to stay....

[marktime1231] 23/11/2022 21:52

Trimmed a few at 1800 and 1900 to bank some gains, my original exit was 2250, but I have upped that to 2500 now the buyback is underway. Not in a hurry, not before this time next year, might even keep some. Lucky enough to pile in at low prices, the yield is still high.

Ex-div will be a predictable drop but I don't think we will get another significantly discounted top-up opportunity until next February when we are clear of the big dividend cycle, coupled with evidence that inflation has peaked and punters can see an end to the high interest rates causing defensive behaviour. Even then the strength of the buyback might prop up the share price

[woodhawk] 23/11/2022 20:51

Wunderbar,

Great and, I suspect, HONEST post - unlike so many of the fantasists on these boards. How refreshing! My holding too, based on share price alone would currently still reveal a loss, but does not account for the excellent divis which have put me decently in profit. I'm inclined to hold for a good while yet as the company does now seem to have turned a significant corner.

[tuftymatt] 23/11/2022 20:19

Best of luck to you Wunderbar and hopefully 2400 comes around quickly for us all 👍🏻

[wunderbar] 23/11/2022 20:14

It’s almost 18 months since I posted on this bb. Thankfully there’s been a marked improvement in both sector sentiment and share price performance during this time. IMB’s share price increased 5% in 2021 having previously suffered five consecutive years of decline. YTD 2022, share price is up 33%, currently 2185p. I have to give credit where it’s due - Stefan Bomhard has [so far] executed his plan to perfection. He’s done what he set out to do in the first two years of his five year turnaround plan - reduce debt, increase market share of key brands, rein in NGP spending, and initiate £1bn share buyback [5% of company]. What’s so refreshing about this is the fact it’s been done in the proposed time frame. Of course IMB’s [unforeseen] forced exit from Russia was a big setback, resulting in a whopping £463m hit. Nonetheless, this didn’t stop the business becoming a lean mean cash machine.

Whilst I don’t post on here too often I do read posts regularly and feel compelled to agree with Marktime1231’s recent comments about persons on here moaning about the £1bn buyback and negligible dividend increase. On the subject of buybacks I have to say I’m not a fan [unless done on grand scale at knock down price], they seldom reward shareholders directly, more often than not deemed to be a waste of money in the eyes of most ordinary investors, many of whom would rather have the cash. Saying that though, the market wanted a buyback and got exactly that, the sheer size of it had a positive impact on the share price. So, imagine my dismay on the day of the announcement [6 Oct - share price closed up 2.5%, was up 4.5% at one stage], rather than see a tide of joyous comments celebrating the soaring share price I was shocked to read many posters on here instead honing in on the buyback news with a barrage of negative comments and completely ignoring the rise altogether. Unbelievable I thought. The way I saw it, the market’s happy therefore shareholders should be. Fact is, since the buyback announcement, the share price has risen 13% [acknowledging full year results also contributed]. At the end of the day I for one don’t care what propels the share price as long it’s going in the right direction.

In the weeks running up to full year results I was surprised to see a few investors on here expecting a large dividend increase of perhaps 5-10%. My initial thought was what planet are these people on. As it transpires the dividend was increased by 1.5%, and again this attracted some negative comments. Came as no surprise to me though. After all, with a current yield of c.6.5% it’s already one of the highest in the FTSE100. And noting it was the reckless dividend policy of previous management that was partly responsible for IMB’s share price decline in recent years. Increasing the dividend c.10% year on year was simply not sustainable as far as the market was concerned, doing so while profits were being squeezed and debt rising was illogical, and so the market eventually got what it wanted in May 2020, seven months after CEO Alison Cooper’s departure, with the interim management team announcing the company would be cutting the dividend by 33% as it sought to prioritise debt repayments [no doubt as instructed by Bomhard prior to his arrival]. Imperial have since implemented a more progress dividend policy, as demonstrated by recent 1.5% increase. Next year I'd expect low to mid single digit growth.

Having made my initial purchase in IMB five years ago [Nov 2017, terrible timing], my investment finally swung into profit for the first time ever when we climbed above 2000p last month [albeit on a technicality if I include dividends]. My biggest mistake was averaging down too many times between 2200p & 2800p during 2018/2019, completely reckless behaviour, all in the false belief this supposed safe-haven FTSE100 stalwart surely couldn’t go any lower. Needless to say it did, big time! Bottomed out c.1200p in 2020. Having made some astute top up’s c.1400-1500p in 2021 my average is now 2400p. As I say, technically speaking my investment is now in profit. However, my ISA says different, currently showing a double digit loss [obviously not recognising divi payouts]. Being a stubborn SOB I’m determined to bail out at 2400p and claw back my entire investment stake [call it a matter of principle]. Given my exit point is only 215 points away it’s not inconceivable we won’t see this target within 3-6 months given current momentum, although tomorrow is ex-div [49.31p] so will be interesting to see how well this holds up. I might even try and trade the last couple hundred points. For the first time in a very long time I’ve started to believe I can exit this stock financially unscathed [not so sure about emotionally unscathed]. I wonder how many other regulars on here contemplating bailing out on higher price. Spud? Marktime?

I sincerely hope the next time I post on this bb is to announce the euphoric moment of finally exiting this stock. Until then.

[tuftymatt] 18/11/2022 14:09

It wants to be above 21 and with many thinking it's worth more I think sub 20 may not be seen for a while.

Will add if we get south of 2050.