Imperial Brands Share Discussion Threads

[philanderer] 25/10/2018 18:15

EJ , these guys agree with you :-)


Market report..

Imperial Brands and British American Tobacco were on the up as investors noted US rival Altria, the maker of Marlboro cigarettes, said it was pulling several of its vaping products off the shelves ahead of possible ban of e-cigarettes to young people in the US.

[scrwal] 25/10/2018 17:19

EJ possibly but then wouldn't that be a red flag as to why are they pulling out and how would that affect other types of products offered, or is it something to do with the FDA as well ?

[ken tennis] 25/10/2018 10:52

IMB on fire today lads in preparation for the divi in November should be 65p

[philanderer] 24/10/2018 23:51

Ooo eerrr

‘Game is over’ for tobacco, says Neptune's Geffen

Neptune Income manager points to tobacco companies' slim dividend cover and warns of risk to rival funds relying on their income.

[ken tennis] 23/10/2018 17:39

Phil on the upside we go XD on 22/11 which should be 65p on IMB.
It was a bloodbath on the 250 today my only up one on there was CRST but it got hammered a few days back when they announced profit warning but that's life.

ATB Ken

[philanderer] 23/10/2018 17:32

Fourteen red / six blue for my lot ... IMB, BATS, TSCO, GSK , LLOY and MKS not making the fall too bad.

Difficult markets for sure.

[garycook] 23/10/2018 12:21

Before launching his own investment company in 2014, Neil Woodford spent more than 26 years with Invesco Perpetual where he earned his reputation as one of Britain’s most formidable stock pickers. Over that period, he turned £1,000 of investors’ money into around £23,000, which is impressive.

So, I’m taking notice of the top holding in two of his funds, which is the FTSE 100’s Imperial Brands (LSE: IMB), the fast-moving consumer goods company supplying products for smokers.
Going against the crowd

However, Neil Woodford’s new funds have been underperforming since he set them up in 2014 and he’s been getting some bad press about it. But he’s no stranger to that. His previous success came from getting the big calls right and investing in areas that many other fund managers avoided at the time, which led to earlier periods of under-performance. Yet he stuck to his often-contrarian stance and prospered in the end.

For example, he piled into tobacco stocks in the early 1990s when they were out of favour with investors and their valuations were low. At the time it looked like aggressive legal action by the US authorities would force the cigarette makers into bankruptcy. But Mr Woodford bet against that happening and he was correct. The tobacco firms went on to prosper and Neil Woodford’s shareholdings prospered with them.

At the beginning of the century when everyone was riding the market higher in the dotcom boom, he avoided over-priced technology stocks, which led his fund to underperform many other funds. Then the bubble burst along with everyone else’s gains and Woodford came out ahead. He went on to sell out of bank shares when he thought they were over-valued, well ahead of the last decade’s financial crisis when many bank names plunged as much as 95% or so. He also loaded up with pharmaceutical shares when patent-expiry concerns had pushed them down and earnings were declining – it was a smart move because they went on to bounce back.

Neil Woodford’s long-term track record of outperformance has often been achieved at the cost of periods of short-term underperformance. I think there is a good chance that the current period of weakness in his funds will end up looking like another of those short-term blips in the end.
A high, growing dividend yield

Right now, It looks like Imperial Brands is a high-conviction pick because it is his largest holding in two of his funds. The Income focus fund has a weighting around 8.49% of Imperial Brand’s shares and the next-largest holding is only 4.54% of the fund. Then, in the Equity Income fund, 8.63% is allocated to the firm, which compares to the next-highest holding of 6.71%.

Yet the share price is down around 37% since the summer of 2015 and the firm looks out of favour with investors in general. As a consequence of the fall, the valuation has plummeted and the dividend yield has shot up. At the recent share price around 2,611p, the forward price-to-earnings ratio for the trading year to September 2019 sits just over nine and the forward dividend yield is 7.8%. Meanwhile, the underlying business has lost none of its defensive, cash-generating qualities and looks capable of paying the ongoing dividend.

I think the dividend-growth potential is attractive and sits well alongside the undemanding valuation. That’s why I’d pile into Neil Woodford’s top holding right now.

[warranty] 20/10/2018 12:25

Completely agree Irene, legalised low doses of recreational cannabis is growing quickly in the USA and Canada with food, drinks and cigarette manufacturers in a good position to take advantage. Now that the government has allowed medicinal cannabis here it's surely only a matter of time before recreational use is legalised too.

[irenekent] 19/10/2018 19:09

Don't forget about the potential in cannabis. Could take the shares to a new high.

[this_time_its_different] 19/10/2018 12:26

IMB will be fine over a 10-15 year period, you just need to hold on. Nicotine is addictive and has immense pricing power as a result. Earnings can rise from price rises itself.

[warranty] 19/10/2018 11:09

EJ I see it slightly differently as I think there is a future for new generation products, especially as they develop, get smaller and improve. IMB is still a profitable company so the current share price seems in bargain territory, especially with the dividend. I do accept regulatory matters may interfere but other than that I think it's just a little patience that's required until the share price recovers so I won't be selling any time soon despite being well down.

[jrphoenixw2] 18/10/2018 22:48

EJ: 'But, I'll stick with a country bumkin rather than some spotty faced drugged up spiv in a shiny and sharp suit to discuss strategy. Not in the habit of major structural change. Ah well, better move with the times, I s'pose'

Will'ya stop posting here then? ;)

[scobak] 18/10/2018 22:24

IMB is top buy tip in IC tomorrow.

[warranty] 18/10/2018 18:16

EJ, not impertinent at all, I just reply to anybody to sound half intelligent!! ;-))

[philanderer] 17/10/2018 09:04

17th oct Jefferies buy tp 3800p up from 3600p

[philanderer] 16/10/2018 20:57

Double whammy for BATS today.


British American Tobacco and Imperial Brands slipped on negative US industry data. Both cigarette makers suffered a 3.8 per cent fall in sales by value for the four weeks to early October, compared with overall market growth of 1.1 per cent, a Nielsen report showed.

[sundial1] 16/10/2018 19:46

Warranty -thanks for your comment.

[warranty] 16/10/2018 19:16

Nobody can say if the share price has bottomed or not sundia but surely, surely we must be close. After the heavy fall on Monday it appeared to be recovering yesterday, only to give it back again today. Clearly the market doesn't like IMB at the moment but if like me you're looking for both income and to hold long term it certainly looks like a bargain even if it falls a little more short term.