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Post by chang on Aug 3, 2022 13:21:40 GMT
US ADR (BTI) yielding 7.56% BATS.L yielding 6.76%
Chart looks pretty inflation-proof. The NAV just dropped below the 200mda, so maybe it's worth watching before buying. Though, actually, if you look at a five-year view, the NAV, 50dma, and 200dma all wobble up and down, but have been basically flat.
I guess people are going to keep smoking no matter what.
Thoughts for the yield?
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Post by liftlock on Aug 4, 2022 15:34:04 GMT
BTI seems like a reasonable choice as an income producing stock and alternative to higher risk bonds. Validea.com rates stocks on factors and gives the BTI ADR a high overall percentage ranking scores (97 out of 100). Value (81), Quality(65), Negative Quality (39), Momentum (90), and Low Volatility (96). Price/Cash flow: 11.1 Shareholder Yield: 14.8%. BTI recently reported earnings and announced a 957 million pound ($1.3 billion USD) write off for discontinuing Russian operations. They gave guidance that they expect to generate 40 billion pounds of cash flow before dividends during the next 5 years.
I own shares of Imperial Brands ADR (IMBBY) which has a 200+ bp higher dividend, a better valuation, with more negative quality risk than BTI. Validea gives it an overall % rank score of (93 out of 100). Value (90), Quality(90), Negative Quality (88), Momentum (96) Low volatility (94). Price/Cash flow: 6.3 Shareholder Yield: 20.18%.
Both stocks sold off during the pandemic and have not recovered since then. Both have held up well in the recent sell off. BTI is more widely traded and has more institutional investors is more widely followed by analysts than IMBBY.
IMBBY will report earnings in the next week or so and has operations in Ukraine that will likely impact earnings.
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Post by chang on Sept 30, 2022 15:08:20 GMT
Just maybe an entry point is presenting itself? I hate the idea of buying a company that kills its customers, especially a company (industry) which spends a significant part of its revenue educating its customers to stop using its product. BUT … the dividends and charts speak for themselves ….
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Post by bizman on Sept 30, 2022 18:09:45 GMT
Just maybe an entry point is presenting itself? I hate the idea of buying a company that kills its customers, especially a company (industry) which spends a significant part of its revenue educating its customers to stop using its product. BUT … the dividends and charts speak for themselves …. View AttachmentI'm not sure about the particulars of BTI, but I am starting to get interested in PM. Currency should hurt their current quarter big time and they are in a struggle with some hedge funds trying to make them up their bid for Swedish Match, but I think there is some value there, despite currency and their problems in Russia and Ukraine. Will be listening to their upcoming earnings call intently. It is scheduled for October 20th.
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Post by chang on Dec 8, 2022 21:24:36 GMT
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Post by johntaylor on Dec 9, 2022 19:08:54 GMT
Always found vice stocks interesting to resist recession, but in 2018 Buffett quoted Munger 3 ways to go broke "liquor, ladies and leverage"
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Post by chang on Jun 5, 2023 16:24:21 GMT
I just looked at BATS.L / BTI, for the first time in a long time. What a miserable chart over 5 years. Now it’s touching its Covid low. But: change the chart to “Max”, and it appears to be bottoming. With an 8.8% yield … is now the time to buy? richardsok uncleharley Norbert I always appreciate your read of the tarot cards. TIA.
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Post by chang on Jun 5, 2023 16:32:59 GMT
SA has a pretty powerful view on BATS: seekingalpha.com/article/4578252-british-american-tobacco-best-time-buy-7-4-percent-yielding-aristocratSummary British American Tobacco p.l.c. just raised its dividend for the 23rd consecutive year (at least). It's a global aristocrat with the lowest payout ratio in its industry. British American Tobacco's 2022 results were very strong, with modest volume declines, incredible pricing power, and 37% growth in reduced-risk products. Management is reducing leverage even more to 2.5 debt/EBITDA, guiding for 5% growth this year and 8% long-term. British American Tobacco stock is trading at 7.9X earnings, pricing in -1.2% growth, and trading at the lowest P/E in 20 years. The last time BTI was 40% undervalued, it soared 3000% in 17 years. British American Tobacco is a potentially an ultra-value, Buffett-style, "fat pitch" buy with a 75% upside to fair value, could double in 3 years and deliver almost 250% returns within five years. Long-term, its 16.5% return potential is the highest in its industry and better than any ETF, including the Nasdaq.
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Post by chang on Jun 5, 2023 16:42:27 GMT
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Post by richardsok on Jun 5, 2023 17:37:44 GMT
ML research excerpts: Bulls Say...
1
The consolidation of Reynolds America gives BAT more exposure to the U.S. market, a high-margin market with headroom to raise prices and optionality in the heated tobacco market.
2
BAT’s global volume is roughly evenly split across price segments and categories, so the company should be well positioned to maintain share as secular and cyclical shifts in consumer preferences occur.
3
BAT's portfolio is well balanced across price segments, meaning it should be fairly defensive in the event of trading down.
Bears Say...
1
BAT has lost first-mover advantage to PMI in heated tobacco, a promising tobacco alternative to cigarettes.
2
The exposure to the premium segment, while a strong source of brand loyalty, could hurt volume share in more markets if governments implement standardized packaging.
3
Next-generation products are more fragmented than cigarettes, with lower barriers to entry, which could be detrimental to overall margins as the category matures.
-----------------
Other remarks: --- Exceptionally low beta. Very good stock for technical traders. Current signals remain bearish. --- Big 4th quarter upward earnings surprise. Oddly, I find no predictions on 1st qtr 2023 earnings. ---- TipRanks score: 5/10. Not great. --- 14 PE higher than its peers --- Dividend appears fully earned.
--------------- My take : I would do nothing until I saw 1st quarter earnings numbers, or at least a prediction from a major analyst. Or one might plan on four equal buys. Make a 1/4 buy right now and then do nothing until MACD technicals improve. I would have confidence on technical signals for such a low beta stock.
---
Good luck.
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Post by chang on Jun 9, 2023 5:59:42 GMT
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Post by Fearchar on Jun 9, 2023 8:41:32 GMT
Almost embarrassed to admit that I already own some given last months decline.
Also, it's cigarettes business and I don't smoke. However, I've found that I tend to like people who smoke.
At Seeking Alpha there are many bullish articles. They also report that Wall Street loves BTI.
Of course, part of the reason for the low price are ESG policies and the European recession.
Anyhow, the real question is how much to own? Currently 3.3% of my portfolio
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Post by chang on Jun 9, 2023 9:12:12 GMT
Almost embarrassed to admit that I already own some given last months decline. Also, it's cigarettes business and I don't smoke. However, I've found that I tend to like people who smoke. At Seeking Alpha there are many bullish articles. They also report that Wall Street loves BTI. Of course, part of the reason for the low price are ESG policies and the European recession. Anyhow, the real question is how much to own? Currently 3.3% of my portfolio Thanks, I just pulled the trigger on a buy, coincidentally about 3.3% of my foreign stock portfolio (not total PV). I gather the "big thing" nowadays for tobacco makers is non-combustible products. I guess that means vaping ... it couldn't mean chewing tobacco. Does anybody chew tobacco? From my viewpoint in Europe, smoking seems to be in no danger of dying out, even if its practitioners do so individually. We had lunch outside yesterday, and the place was full of smokers. The majority of them? Young women, followed by young men. The stupidity is, of course, astonishing beyond all comprehension. However, I have no compunction profiting from other people's stupidity. I will practice retiredat48's method and add to the position if it rises 5%.
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Post by chang on Jun 23, 2023 9:20:14 GMT
The 1 year chart seems to suggest the price is bottoming. Of course, it has appeared to form a bottom before, only to go lower. Still, when you zoom out to 1 year, the recent bottom has a particularly callipygous appearance. retiredat48 : My first buy is up slightly … what’s the minimum increase you require before making a second buy on the way up? 2.5%? 5%? Chart (click on "1Y"): finance.yahoo.com/quote/BATS.L?p=BATS.L
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Post by retiredat48 on Jun 23, 2023 20:47:29 GMT
The 1 year chart seems to suggest the price is bottoming. Of course, it has appeared to form a bottom before, only to go lower. Still, when you zoom out to 1 year, the recent bottom has a particularly callipygous appearance. retiredat48 : My first buy is up slightly … what’s the minimum increase you require before making a second buy on the way up? 2.5%? 5%? Chart (click on "1Y"): finance.yahoo.com/quote/BATS.L?p=BATS.LYou set the pyramid up percentage targets. 3% typical. For investments with high volatility, may need a higher percent. Tobacco makers likely slow-movers. You can also double buy at any point if feel confident. Like, if you target five buys, and the first three buys have worked out quite well, may want to go fourth and fifth buy at same next time. R48
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Post by chang on Jun 24, 2023 16:06:04 GMT
retiredat48: can I ask you a followup question. Suppose you bought ABC for its high dividend, and as a second objective, NAV growth. Suppose it goes nowhere for six months. But you want to add more; maybe your first buy was only 1/4 or 1/3 of what you envisioned as an “eventual position”. PyrUp says you shouldn’t buy until it’s in an uptrend. But it’s a fairly low volatility asset to begin, and it’s just flat — but paying a good dividend. Do you allow yourself another buy?
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Post by retiredat48 on Jun 24, 2023 16:19:07 GMT
retiredat48 : can I ask you a followup question. Suppose you bought ABC for its high dividend, and as a second objective, NAV growth. Suppose it goes nowhere for six months. But you want to add more; maybe your first buy was only 1/4 or 1/3 of what you envisioned as an “eventual position”. PyrUp says you shouldn’t buy until it’s in an uptrend. But it’s a fairly low volatility asset to begin, and it’s just flat — but paying a good dividend. Do you allow yourself another buy? Some in the past have used "length of time" to next buy in a pejorative backtesting way...such as in showing for instance in three more years a fund (or S&P) went above initial purchase price, and "assumed" I resumed buying with PyrUp. I repeatedly stated for me, a six month or more wait meant to "Start Over." As in...pyr up saved you from dead money, especially if fund declined. So the key questions are: why did you, the investor, miss something? Everyone expects a stock to go up longer term. Is the story still sound? Is the sector still a sound buy? Most of the time, I'm onto a different fund or investment space, that was not a "laggard". But yes, you can buy, just think of "starting anew" if a long period of time has lapsed. Start with asking: Do you think a "compelling value" still exists? R48
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Post by chang on Jun 24, 2023 17:37:04 GMT
Thanks retiredat48. That clarification helps. I’m no expert, but it seems to me based on rudimentary analysis that BAT is a safe dividend payer and a good value. It’s certainly a better value now than it has been any time during the last year. I know there’s significant legal and regulatory risks, but I assume the company management does, too. From my perspective outside the US, young people continue to take up smoking like nobody’s business. I have no problem profiting from other people’s stupidity, although ideally a company should not sell a product that kills its customers. Still, people seem to be lining up to buy tobacco products. The chart seems to be showing a bottom of sorts … not that I have any ability whatsoever to discern that, but like I say, the dividend looks good and safe. That makes it easier to hold. I’d like to add to my position. I’m not in a hurry, but sometime during the next few months. I don’t really know whether it’s better to buy *before* or *after* the XD date. From a tax perspective, obviously, after. But some people buy before … I don’t really know why.
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Post by liftlock on Jun 25, 2023 1:29:38 GMT
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Post by yogibearbull on Jun 25, 2023 12:34:10 GMT
Dividend Capture
Dividend capture was popularized years ago when Japanese insurers were restricted in using principal and needed portfolio income that was available in the liquid US markets via dividend capture. But the Japanese laws were changed and this distortion in the US markets went away. However, many old references still remain on the web and may give the impression to casual searchers that the technique is more common than it is now.
Obviously, the tax angle is a negative because one is "buying tax liability".
But its use continues from the observed phenomenon that many stocks quickly recover their dividend-related price reductions (by the Exchange on the morning of the ex-div date). There are some explanations for this, including that most investors just watch prices and some T/A followers use actual-prices instead of adjusted-prices. But this dividend-makeup-bounce would benefit both the buyers before and after ex-div, so the tax angle should drive the decision. Most brokers' limit/stop-orders adjust limit/stop-prices by the distributions but also provide the option "Do not reduce" (beware that the order may be executed on the ex-div date morning).
BTW, this phenomenon is NOT observed for mutual funds/OEFs that use only market-close prices; most mutual fund/OEF prospectuses warn about this and recommend purchases after the major ex-distribution dates. The flip side is that selling ahead of ex-distribution date may have tax advantages if dividends are nonqualifying.
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Post by steadyeddy on Jun 25, 2023 13:11:22 GMT
Thanks retiredat48 . That clarification helps. I’m no expert, but it seems to me based on rudimentary analysis that BAT is a safe dividend payer and a good value. It’s certainly a better value now than it has been any time during the last year. I know there’s significant legal and regulatory risks, but I assume the company management does, too. From my perspective outside the US, young people continue to take up smoking like nobody’s business. I have no problem profiting from other people’s stupidity, although ideally a company should not sell a product that kills its customers. Still, people seem to be lining up to buy tobacco products. The chart seems to be showing a bottom of sorts … not that I have any ability whatsoever to discern that, but like I say, the dividend looks good and safe. That makes it easier to hold. I’d like to add to my position. I’m not in a hurry, but sometime during the next few months. I don’t really know whether it’s better to buy *before* or *after* the XD date. From a tax perspective, obviously, after. But some people buy before … I don’t really know why. chang, I too am not particular about ESG or moral principles of investing. Investing is to make money. Excessive eating, and drinking also kill. Polluted air & water lead to many diseases too. I am sympathetic but it is not a consideration in my investment ideology.
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Post by chang on Jul 3, 2023 11:50:20 GMT
The recent bottom of BATS is looking more callipygous every day. The next XD date is July 13. I’m thinking of a buy after that, if the chart continues to show strength.
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Post by chang on Jul 3, 2023 12:05:25 GMT
Dividend CaptureDividend capture was popularized years ago when Japanese insurers were restricted in using principal and needed portfolio income that was available in the liquid US markets via dividend capture. But the Japanese laws were changed and this distortion in the US markets went away. However, many old references still remain on the web and may give the impression to casual searchers that the technique is more common than it is now. Obviously, the tax angle is a negative because one is " buying tax liability". But its use continues from the observed phenomenon that many stocks quickly recover their dividend-related price reductions (by the Exchange on the morning of the ex-div date). There are some explanations for this, including that most investors just watch prices and some T/A followers use actual-prices instead of adjusted-prices. But this dividend-makeup-bounce would benefit both the buyers before and after ex-div, so the tax angle should drive the decision. If this bounce is real, then it seems to me it would benefit the buyer before the XD. It also means you could buy before and sell after the XD, and essentially get the dividend over a very short period. I don’t believe in free lunches, so I’m suspicious of this.
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Post by liftlock on Jul 3, 2023 14:06:51 GMT
The recent bottom of BATS is looking more callipygous every day. The next XD date is July 13. I’m thinking of a buy after that, if the chart continues to show strength. When I first bought PBR, I considered selling my position the day before the x-dividend date with the idea that I might be able to buy back shares at a cheaper price. The share price decline on the x-date was less than the dividend so it ended up making sense to just hold shares. When buying a new position in a taxable account, it probably makes sense to buy on or after the x-date and avoid owing tax on the dividend. However, one's tax basis will be lower, and potential capital gain higher, if this is done.
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Post by chang on Jul 3, 2023 17:56:38 GMT
I’m still not seeing why one should buy on the XD if there’s a quick bounce. Even if the bounce amounts to 50% of the price drop, it would be worth buying before the XD, since tax on the dividend is what … 20%?
Besides which, if you get a bounce, you pay the tax eventually as a CG.
The more I think about this, if there’s any kind of bounce at all, I think I should buy before the XD. However, I still refuse to believe there’s any free lunches or ways of gaming the system. So… I remain a bit confused.
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Post by richardsok on Jul 3, 2023 19:17:40 GMT
I’m still not seeing why one should buy on the XD if there’s a quick bounce. Even if the bounce amounts to 50% of the price drop, it would be worth buying before the XD, since tax on the dividend is what … 20%? Besides which, if you get a bounce, you pay the tax eventually as a CG. The more I think about this, if there’s any kind of bounce at all, I think I should buy before the XD. However, I still refuse to believe there’s any free lunches or ways of gaming the system. So… I remain a bit confused. There MIGHT be some little gain buying on the XD, but I doubt if it would be significant. Perhaps someone could work out a theoretical portfolio of five high paying stocks (5-7% in dividends, say) and work out a back test. One idea I thought of (but never attempted) was to buy a stock one week before its ex-div AND sell an at-the-money covered call expiring a month out two days before XD. I'd close everything out two or three days after the ex div, or earlier if I saw a net gain. You'd surely get your dividend, you MIGHT get a mini-rally after the XD, and you'd be almost assured your short call would drop in value when the stock price plunged XD. Since you're holding a short call, you might even get a little time-loss erosion over two or three days of holding. Don't try this at home, kids. Just an idea I had.
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Post by liftlock on Jul 3, 2023 19:39:24 GMT
I’m still not seeing why one should buy on the XD if there’s a quick bounce. Even if the bounce amounts to 50% of the price drop, it would be worth buying before the XD, since tax on the dividend is what … 20%? Besides which, if you get a bounce, you pay the tax eventually as a CG. The more I think about this, if there’s any kind of bounce at all, I think I should buy before the XD. However, I still refuse to believe there’s any free lunches or ways of gaming the system. So… I remain a bit confused. If you think there is going to be a bounce, then it makes sense to buy before the bounce. If you are waiting for a bounce to confirm an uptrend, then buy as soon as the uptrend bounce occurs. You are not seeing a benefit by waiting until the x-date, because any potential benefit is probably quite small. If the stock price is declining and you wanted to buy and hold the stock, then there might be small potential benefit to waiting until the X-date to buy the stock.
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Post by chang on Jul 12, 2023 18:42:02 GMT
Just made another buy. Possibly will repeat tomorrow on the XD date. I am still liking the dividend and the apparent bottoming.
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