August 4, 2020

Trading signals! | The tobacco industry.

The tobacco industry.
Trading signals! | The tobacco industry.

Trading signals! | The tobacco industry.

https://www.statista.com/statistics/259204/leading-10-tobacco-companies-worldwide-based-on-net-sales/

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Big Tobacco
https://en.wikipedia.org/wiki/Big_Tobacco

THE GLOBAL CIGARETTE INDUSTRY
https://www.tobaccofreekids.org/assets/global/pdfs/en/Global_Cigarette_Industry_pdf.pdf

To these types of products (if it is correctexactly what to call it), include: alcoholic beverages, sugary soft drinks, coffee, pharmaceuticals (for example: sedatives) and a number of certain food products. I mean exactly what is addictive and brings, to some extent, both satisfaction and harm ...

This is a category of goods with inelastic demand.
The business model of some of these companies (such as the Altria Group) can be very resilient even in times of severe storms.
Such goods:
1. Bring results;
2. Run out quickly;
3. Required again.

Not bad ... Can be compared to toilet paper, toothpaste, diapers, toothpicks, earpicks, napkins ...
This is one of those categories of goods that people buy practically regardless of the state of the economy.

Altria Group, Inc.
https://www.altria.com/
Altria Group, Inc. (formerly known as PhilipMorrisCompanies, Inc... ) Is an American corporation and one of the world's largest manufacturers and sellers of tobacco, cigarettes and related products.
https://en.wikipedia.org/wiki/Altria

Altria Reports 2020 Second Quarter and First-Half Results; Reestablishes 2020 Full-Year Earnings Guidance; Announces IQOS Expansion Plans; Board Declares Dividend Increase
http://investor.altria.com/file/Index?KeyFile=404762764

SEC Filings
http://investor.altria.com/SEC-Filings

Altria's Profile

Altria's wholly-owned subsidiaries include PhilipMorris USA Inc. (PM USA), U.S. Smokeless Tobacco Company LLC (USSTC), John Middleton Co. (Middleton), Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman), Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and Philip Morris Capital Corporation (PMCC). Altria owns an 80% interest in Helix Innovations LLC (Helix). Altria holds equity investments in Anheuser-Busch InBev SA / NV (ABI), JUUL Labs, Inc. (JUUL) and Cronos Group Inc. (Cronos).
The brand portfolios of Altria's tobacco operating companies include Marlboro®, Black & Mild®, Copenhagen®,Skoal® andon!® ... Ste. Michelle produces and markets premium wines sold under various labels, including Chateau Ste. Michelle®, 14 Hands®and Stag's Leap Wine Cellars, and it imports and markets Antinori®, Champagne Nicolas Feuillatteand Villa Maria Estateproducts in the United States. Trademarks and service marks related to Altria referenced in this release are the property of Altria or its subsidiaries or are used with permission.

M&A is best described by Peter Drucker:
“I'll tell you a secret: making deals is better than just working. Making deals is fun and enjoyable, and work is dusty. Leading something - first of all, doing a lot of hard and painstaking work ... making deals is romantic, sexy. That is why so many completely meaningless deals are being made. "

The company informs:
“The volume of supplies of cigarettes in the domestic market decreased by 1.9%, mainly due to losses in retail trade, the rate of decline in the industry and other factors ...”.

It's worth noting that Altria is highly inflation-adjusted.
The company is able to raise prices for its products, with little or no damage.
An important fact is the localization of the company.

When it comes to reducing cigarette use,it is necessary to take into account the fact that this increases the use of nicotine-containing products through: electronic cigarettes (vapes), IQOS and a number of non-smoking mixtures.

December 20, 2018 Altria completed the acquisition of 35% of shares JUUL Labs, an e-cigarette company based in San Francisco, California, for $ 12.8 billion.
Juul Labs, Inc.
https://www.juul.com/
https://en.wikipedia.org/wiki/Juul

IQOS
https://iqos.com/

  • In July, the US Food and Drug Administration (FDA) approved sell IQOS and HeatSticks as modified risk tobacco products with a “reduced exposure” requirement.
  • In July, PM USA launched IQOS in Charlotte, opening a boutique under enhanced security protocols. PM USA expects HeatSticks will be sold in over 700 retail stores in Atlanta, Richmond and Charlotte markets by the end of August.
  • Over the next 18 months, PM USA plans to expand IQOS up to four additional markets, joining partnering with retail retailers to make devices IQOS more accessible and wider distribution HeatSticks in neighboring regions of seven leading markets.
  • Exclusive Licensing and Distribution Agreement for IQOScompany PM USA with Philip Morris International Inc. has two important milestones:
  • PM USA will retain exclusive distribution rights in the US after reaching a 0.5% share in one geographic area for a specified time period by April 2022.
  • In addition, the distribution rights of PM USAan initial five-year period applies. The original term expires in April 2024 and is renewed at the discretion of PM USA for an additional five years after reaching the 0.5% dollar share in the cigarette category in a specified number of geographic areas, each for a specified period of time.
  • Altria Group's proposed dividend yield,taking into account the almost zero yield on US Treasury securities (https://www.bloomberg.com/markets/rates-bonds/government-bonds/us), looks very attractive. Especially considering the company's dividend history.
    Trading signals! | The tobacco industry.

    Trading signals! | The tobacco industry.

    I find it difficult to comment on this.
    I have said more than once: the issue of real profitability is very acute now ...

    Dividend
    As of July 31, 2020, excluding the increase in dividends.
    Trading signals! | The tobacco industry.

  • On July 27, 2020, Altria's board of directors announced an increase in quarterly dividend to $ 0.86 per share from $ 0.84 per share.
  • The new annual dividend is $ 3.44 per share, up 2.4% from $ 3.36 per share.
  • Altria maintains its long-term target of a target dividend payout ratio of approximately 80% of adjusted diluted earnings per share.
    This dividend increase marks the 55th dividend increase in 51 years, said Sal Mancuso, Altria's chief financial officer.
  • Common Equity Dividends
    http://investor.altria.com/Dividend-Information
    Trading signals! | The tobacco industry.

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    </strong>This material is provided exclusively forinformational purposes and is not an offer or request to buy or sell securities of any company. Any investment decision made by you should not be made solely on the basis of the information described in this article. The author is not responsible for losses or profits you have received during trading in financial markets.