gamesinvestor
16 Jul 2017
Re: Woody out of BATS, still in IMB Bill - some of this was posted on GSK in response to LK's first reading the June update from Woody's sidekick Mitch.BAT's stats look better than at anytime in the last 5 years as highlighted here."""""Well back in 2012 - 5 years ago the P/E on BAT was 30 and it was growing it's earnings at about 5% a year so the valuation looked quite rich with a PEG of 5.6.Today BAT has a P/E at 18 and falling to 16 next year with a growth rate of 15% and 8 % respectively. This is largely due to successful cost cutting and focus on premium brands. This is set to continue as the number of players in the ciggy industry shrinks. BAT has increased it's operating margins from 36% last year to 42% this year and has an ROCE of a handsome 40+. Also the dividend has better cover now than it did in 2012.BAT looks far from fagged out in my view but I guess only time will tell. I'll hang on to my (quick check) around 2% holding and collect the dividends.""""Also, had I not been of the view that IMB is a takeover target I'd say BAT at a forward P/E of 16 and a growth expectation in earnings of 15% this year is better than IMB at 12.2 and 3% respectively. I know you don't like snapshot P/E-PEG and growth figures in isolation, so looking at the last 5 years here are the growth in earnings for both companies :-IMB -- 7%, 5%, -3%, 4%, 17%BAT -- 5%, 5%, -45, 100%, 19% So historically BAT has a better recordThe guestimates for the current and next years are IMB -- 8%; 3% -- also IMB's last quarterly results were quite poor.BAT -- 15%; 8%On borrowings IMB has 12.3Bn; BAT 16.4BNand a simple ratio versus operating profitBAT -- £16.5Bn/ £4.6Bn = 3.58IMB -- £12.3BN /£2.2BN = 5.59Games
Bill1703
16 Jul 2017
Re: Woody out of BATS, still in IMB "Personally I think BAT has a better forward valuation than IMB, I'm keeping both."Games - would like to see that analysis on BAT?I too am happy keeping my IMB... wouldn't be buying BAT up here, if anything I will be buying more IMB. But open to persuasion, as always....
gamesinvestor
15 Jul 2017
Re: Woody out of BATS, still in IMB Personally I think BAT has a better forward valuation than IMB, I'm keeping both.My weighting in IMB is higher because I believe it wil be bought, but if BAT were smaller than IMB, my weighting would be reversed.Woody isn't the messiah, he's been wrong on just about every large investment he's made lately so I'd be sceptical on this one.Games
Bill1703
15 Jul 2017
Woody out of BATS, still in IMB Full article:[link] manager Neil Woodford of Woodford Investment Management made a number of key buys and sells within his three portfolios during the month of June.The big news is that within CF Woodford Equity Income and Income Focus he has sold his position in British American Tobacco (BATS), which has been in both funds since their inception and, indeed, a part of his mandates for most of his career.Woodford believes the sector is now starting to look fully valued. His team points out that at the peak of the dotcom bubble in March 2000, you could have bought BAT for only 225 per share. Woodford just sold his at over £50 per share.He retains some tobacco exposure through Imperial Brands (IMB), which he believes is still undervalued, although "the valuation opportunity elsewhere in the sector has largely played out".
picstloup
14 Jul 2017
Re: Should I sell Well, I have sold most of my last ones at £52.8, just keeping 100 of my original stake, on the grounds that they have effectively -0 book cost, and if they do fly up to £60/70+, at least I won't lose all the upside. Now something like 20% in cash, half expecting a "correction".
gamesinvestor
30 May 2017
Re: Should I sell caesat - Isn't your decision to sell better based on where you think BATS is going from here?History has been very generous to your returns - perhaps it might also be in future?Games -- always difficult to sell a good performing investment, then again one day it all might go up in smoke?
caesat
29 May 2017
Should I sell Having bought for £8.90 in 1989 what is my base cost now following Allied Dunbar split off etc etc. Any clues?
tradingup
28 May 2017
WHITE KNUCKLE RIDE I;m holding in there but now at £55 and rising heat in the kitchen is getting a tad uncomfortable.Is sixty the new target? How sustainable is it? Keep recalling the thoughts of the Sunday Times guy - 'no more advertising or sponsorship to pay for.. no fancy packaging adding to costs.. and with fewer cigs being produced machinery lasting for longer. with such help from the Govt its win win win all the way;??
picstloup
25 May 2017
Taking profits Sold half my holding today at 5462, a respectable 80% gain in 5 years, using up most of this year's cgt exemption. Now down to 2.5% of stash.
II Editor
16 May 2017
NEW ARTICLE: Two investment trust discount opportunities "The philosopher Isaiah Berlin once observed: "How few are the lucid intervals during which reason can function freely, and how fruitful it is and how beneficent when it is freed." A contrarian approach does indeed work best when the investment ..."[link]
Apostrophe
16 May 2017
5450 reached... Sudden increase? For why?
gamesinvestor
15 May 2017
Director purchase 10-May-17 British American Tobacco BATS Bowles, Jack 75,000 @ 52.96p £3,971,755.60Games -- Chunky commitment
II Editor
12 May 2017
NEW ARTICLE: Why Neil Woodford just bought Lloyds Bank shares "After a "disappointing" 2016 and embarrassing collapse in the value of his stake in LSE:ALM:Allied Minds, star fund manager Neil Woodford has spent the past few weeks knocking his portfolios into shape."Neil has been keen to take advantage of ..."[link]
Old Eyes
24 Feb 2017
Re: Finals You didn't buy into the huge fears put about by NigeTheSnake and a non-smoking day in January?No, me neither
Hardboy
23 Feb 2017
Finals Look good to me - volumes up, sales up, profits up, dividend up, top dog in e cigarettes, excellent geographic spread, with a weak pound helping the reported results; and the Reynolds take over to come. Elephants don't gallop; but this has a fabulous record of share price growth over the decades. It's not cheap, but neither is it overly expensive; and there are few businesses offering such reliable returns, At one time I thought they would be destroyed by law suits for causing fatal disease; much as the old asbestos producers were; but somehow they got through that. I think a PE of 22 is a reasonable near term target, which would mean an sp of around 5450.
