Seeking Alpha

Eric Linser, CFA's  Instablog

Eric Linser, CFA
Send Message
Green Valley Wealth Advisors’ Chief Investment Officer, Eric Linser, CFA, oversees the implementation of the firm's investment strategies. Eric has been actively involved in wealth management, research, and providing financial advice since 1990.
My company:
Green Valley Wealth Advisors
My blog:
Green Valley Wealth Report
  • Philip Morris International - A Smoking 2nd Quarter Result and Outlook 0 comments
    Aug 17, 2011 5:33 PM | about stocks: PM

    We added Philip Morris International (NYSE: PM) to Green Valley’s Eagle Portfolio on August 3, 2011.

    Philip Morris International (PM) manufactures and markets cigarettes internationally in over 160 countries around the world. The company holds an estimated 15% share of the international cigarette market.

    Philip Morris International was spun off from Altria Group (Philip Morris USA) in March 2008. Philip Morris International sells its cigarettes and other tobacco products internationally, so it’s not subject to US regulation and taxation.

    The company has a strong balance sheet, the cash flow generating ability to drive future growth, and a big ~ 3.7% dividend yield, exceeding the yield on the 30 year US Treasury of 3.56% (as of 8/17/2011).

    The company reported second quarter 2011 earnings per share, excluding special items, of $1.34, surpassing consensus estimate of $1.21. Year-over-year, earnings per share were up 34.0% in the 2nd quarter, attributable to price increases and strong volume growth in Asia.

    The company’s operating income increased 19.5% to $6.7 billion and its quarterly gross profit expanded by 20.4% year-over-year to $5.4 billion. For all of 2011, the company now expects to earn $4.70 - $4.80 versus $3.92 in 2010, equating to 13.5% -16% year-over-year growth.

    We are bullish on the company given its superior combination of strong revenue and earnings growth over the foreseeable future. Heck, given stress of market gyrations, we may even take up smoking Marlboros ourselves! (kidding)

    Given these business metrics, the company now delivering positive results and expected future free cash flow significantly in excess of their cost of capital, we believe Philip Morris International represents the kind of high-quality company we like to invest in.

    The stock is currently trading around a 33% discount to our valuation target. Over time, we expect the market to recognize the intrinsic long-term value of the company, to the benefit of investors.

    Philip Morris International has the right stuff according to our research and has been purchased in the Eagle Portfolio. You can read our investment philosophy on our manager page or visit our website at

    Themes: dividend yield play Stocks: PM
Back To Eric Linser, CFA's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • August: All's Well That Ends Well
    Sep 9, 2014
  • Global fin'l system on verge of credit crunch, analysts warn. Credit default swaps on banks worldwide reach fresh highs
    Oct 3, 2011
  • IMF cuts global growth estimates (again) to 4.0% this yr & next. US @ 1.5% & 1.8%. Emerging countries @ 6.4% & 6.1%
    Sep 20, 2011
More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.