Holy Smoke - My Favorite Idea That Everyone Knows But Doesn't Understand
Jenks Jumps • 292 Comments
Jenks Jumps • 292 Comments
Tue, Sep. 20, 4:28 PM
- Shareholders holding sizable positions in SABMiller (OTCPK:SBMRY) are in the spotlight as the company's meeting on September 26 approaches. The vote on the Anheuser-Busch InBev (NYSE:BUD) merger will be the main event of the SABMiller gathering.
- Large institutional shareholders such as BlackRock and State Street Global Advisers are seen approving the deal because they also own interests in BUD and Molson Coors, but the hedge fund vote is harder to forecast. Some hedgies may gamble and skip out on voting by declining to convert their options and derivatives to save on the exercise tax.
- Another reason that the merger vote may be closer than anticipated is that both Altria (NYSE:MO) and the Santo Domingo family are excluded from having a say.
Tue, Sep. 20, 9:24 AM
- Altria Group (NYSE:MO) reaffirms 2016 EPS guidance of $3.01 to $3.07. The consensus estimate from analysts is at $3.05. Altria's guidance doesn't include new charges related to the early retirement of debt.
- Altria expects that its full-year effective tax rate will increase 10 bps to 35.4%.
- The company's guidance update doesn't factor in the Anheuser-Busch InBev-SABMiller combination since the deal hasn't closed yet.
- Source: Press Release
Fri, Sep. 16, 3:23 AM
- A month after assuming regulatory oversight over e-cigarettes, the FDA has cracked down on online sales by the industry, issuing 24 letters to websites for illegal sales to minors.
- The agency hasn't moved to ban online purchases, as many in the industry expected, but the letters show it's closely monitoring those outlets.
- Websites and stores will have 15 days to reply and explain how they plan to prevent future underage sales.
- Related tickers: MO, BTI, LO, PM, OTCQB:ECIG, OTCQB:VAPE, OTCPK:HPNN, OTCQB:MCIG, OTCQB:NTRR, OTCPK:VAPR, VPCO, RAI, OTC:AHII
Tue, Sep. 13, 7:39 AM
- There's another bullish call from Wall Street on the tobacco sector this morning as Citi initiates coverage on both Reynolds American (NYSE:RAI) and Altria (NYSE:MO) with Buy ratings.
- Analyst Adam Spielman expects "robust" cigarette demand in the U.S. and points to the potential for dividend increases.
- Philip Morris International(NYSE:PM) is rated at Neutral by Citi. Shares of Philip Morris have outperformed the other two tobacco stocks on a YTD basis (+15% vs. +11% for MO and +4% for RAI).
- Previously: Philip Morris moves higher after Goldman Sachs turns positive (Sept. 12)
Fri, Sep. 9, 8:09 AM
- Big Tobacco is pouring money into California in an effort to defeat a proposal to increase the state tax on cigarettes to $2.87 per pack.
- Opponents of the tax increase have raised over $35M to double the $17M generated by supporters of the tax.
- Analysts believe the vote in California is crucial with other states likely to watch the outcome very closely and some global implications in play as well.
- Proposition 56 language: "Increases cigarette tax by $2.00 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine."
- Related tobacco industry stocks: PM, MO, VGR, RAI, OTCQX:ITYBF, BTI, OTCQB:ECIG, OTCQB:VAPE, OTCPK:HPNN, OTCQB:MCIG, OTCQB:NTRR, OTCPK:VAPR, OTC:AHII.
Tue, Sep. 6, 12:03 PM
- Efforts in Europe to convince money managers to skip tobacco stocks have fallen flat, according to Reuters. Only French insurance giant Axa sold off its position in tobacco companies on moral grounds.
- "We are firmly of the view that profits, cash and dividends from tobacco stocks have many years of strong growth ahead," says Woodford Investment Management's Stephen Lamacraft. The fund manager's view seems to be the majority opinion based off of recent investment returns in the sector.
- Related stocks: Phillip Morris International (NYSE:PM), Altria (NYSE:MO), Reynolds American (NYSE:RAI), British American Tobacco (NYSEMKT:BTI), Japan Tobacco (OTCPK:JAPAF, OTCPK:JAPAY), Imperial Brands (OTCQX:IMBBY, OTCQX:ITYBF).
Thu, Aug. 25, 3:07 PM
Tue, Aug. 23, 7:08 AM
- A court in the U.K. rules that Altria (NYSE:MO) and Bevco can be treated as a separate class from other SABMiller (OTCPK:SBMRY) shareholders in connection with a vote on the company's merger with Anheuser-Busch InBev (NYSE:BUD).
- Both classes will need to approve the terms of the merger by a 75% rate.
Fri, Jul. 29, 11:30 AM
- The board at SABMiller (OTCPK:SBMRY) officially throws its support behind the acquisition of the company by Anheuser-Busch InBev (BUD +2.4%). The £79B ($104.94B) offer was at the "lower end" of the company's acceptable range.
- A-B landed its last required regulatory approval earlier today in China after raising its offer for SABMiller at the beginning of the week.
- The deal brings together a large number of beer brands into the same corporate house even after key divestitures across regions. A partial list of the Megabrew assets includes Bud Light, Budweiser, Michelob, Rolling Rock, Busch, Shock Top, Natural, Goose Island, Blue Point, Four Peaks, Grolsch, Pilsner Urquell, Foster's Lager, and Castle Lager.
- Shares of MolsonCoors (NYSE:TAP) are up 3.32% with the company now set to control MillerCoors in the U.S. by itself. SABMiller stakeholder Altria (MO +1%) also perked up after the announcement.
Wed, Jul. 27, 7:38 AM
- Altria (NYSE:MO) reports a 5% drop in volume for smokeable products in Q2. Volume for the Marlboro brand was down 5.5%.
- Retail cigarette market share held steady at 51.4%. Cigar market share fell 110 bps to 26.7%.
- Adjusted OCI margin for smokeable products rose 260 bps to 50.1%.
- Revenue for smokeless products was up 9% to $523M on a 4% gain in volume. Retail market share for the category improved 110 bps to 55.8%.
- Altria increases full-year EPS guidance to $3.01-$3.07 vs. $3.05 consensus. The company expects a full-year effective tax rate of 35.3%.
- Previously: Altria beats by $0.01, misses on revenue (July 27)
- MO +0.68% premarket to $68.39.
Wed, Jul. 27, 7:03 AM
Tue, Jul. 26, 5:30 PM
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Tue, Jul. 26, 11:34 AM
- Bloomberg Gadfly outlines the case on why the board at SABMiller (OTCPK:SBMRY) should reject the upped offer from Anheuser-Busch InBev (BUD +1%).
- Though the new deal valued at $104B offers larger shareholders such as Altria (MO -0.8%), Bevco, and hedge funds improved partial share alternative benefits, the premium is still on the thin side for smaller investors due to the pound devaluation.
- Also, the risks of combining two companies with dramatically opposing cultures can't be ignored, warns Bloomberg.
- SABMiller's board is expected to review the offer after regulators in China weigh in on the merger.
- Previously: AB InBev sweetens offer for SABMiller (July 26)
Tue, Jul. 19, 10:50 AM
- Anheuser-Busch InBev (BUD -1%) is lower ahead of SABMiller's highly-anticipated annual meeting scheduled for Thursday.
- The meeting takes on added significance with more reports out indicating that new activist investors may push the company to seek a better deal out of Anheuser-Busch. They could face some resistance from large stakeholders Altria (NYSE:MO) and the Santo Domingo family which are in line for a more favorable "partial share alternative" in the merger due to the recent drop in the pound and gain in BUD's share price.
Mon, Jul. 18, 11:02 AM
- Japan Tobacco (OTCPK:JAPAF, OTCPK:JAPAY) is making a strong play to grab market share in the U.S. with a new brand priced very low.
- LD cigarettes cost $2.81 per pack at select stores in North Carolina and South Carolina in a limited roll-out of the budget brand.
- Japan Tobacco faces an uphill battle in grabbing shelf space in the U.S. from cigarette heavyweights Altra (MO -0.5%) and Reynolds American (RAI -0.2%).
Wed, Jul. 13, 11:35 AM
- It's steady as she goes again for the group of well-known consumer staples stocks that investors continue to find appealing amid global volatility and low interest rates.
- Procter & Gamble (PG +0.2%), Colgate-Palmolive (CL +0.4%), Clorox (CLX +0.6%), Kimbery-Clark (KMB +0.3%), Coca-Cola (KO +0.2%), PepsiCo (PEP +0.7%), Altria Group (MO +0.5%), Philip Morris International (PM +0.1%), Church & Dwight (CHD +0.3%), and Unilever (UN, UL) have all outperformed the S&P 500 Index this year with returns ranging from 7% to 18%. Kraft Heinz (KHC +1%), Energizer (ENR -0.6%), Hershey (HSY +0.4%), Campbell Soup (CPB +0.3%), and J.M. Smucker (SJM +0.4%) are all up at least 20% YTD.
- Goldman Sachs has an explanation on why a generous valuation is warranted for the staples favorites.
- "We raise our average Staples target multiples to 20-22X P/E, up from the 19-20X range prior, to reflect the recent decline in 10-year yield as well as some likelihood of a slower rise in yield over the next 12 months and broader market volatility," wrote the MNST)+(NYSE:STZ)+(NYSE:PF)/11822884.html" target="_blank">analyst team covering the sector in a note to investors.
- Top consumer staples picks from GS include Monster Beverage (MNST +0.4%), Constellation Brands (STZ +0.2%), Pinnacle Foods (PF +1.2%), and Post Holdings (POST +0.5%).
- Consumer staples ETFs: XLP, VDC, FXG, RHS, FSTA, PSL, PSCC.