Author Topic: MO - Altria Corp  (Read 5123 times)

DooDiligence

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MO - Altria Corp
« on: November 15, 2018, 11:52:59 AM »
I searched & couldn’t find an Altria thread.

If someone else finds one & links it here or bumps it up, I’ll delete this & repost in the existing thread.

Meanwhile, a lot of users have discussed Altria (peripherally) and it appears that a few have taken positions so here goes.

—-

Altria doubles down in their latest response to the FDA.

“We welcome FDA’s efforts to address the underage use of e-vapor products. That is why we believe Congress should raise the legal age of purchase for all tobacco products to 21.”

https://www.apnews.com/d8e46bd9698349178c075411ed09977b

—-

I like this move but can’t exactly explain why  ???
Healthcare 40.8% - ABC BBH CVS DVA EW NVO // BRK.B - 14.7% // Media & Communication 12.7% - CHTR CMCSA DIS

Drinkers & Smokers 13.5% - ABEV MO // Auto's & Oil 13.8% - CLB GPC VDE // Tech & Comms 4.4% - AAPL SFTBY

%'s held @ MV 11/23/2018 minus $$$ 4 skool

ready 2 wait

https://twitter.com/tunawish


orthopa

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Re: MO - Altria Corp
« Reply #1 on: November 15, 2018, 01:54:54 PM »
Well for one getting rid or eliminating e vapor products kills Juul and others that have invested much more time effort to extract that market segment. MO breaks even or loses money on e vapor/MarkTen products not to mention the contribution to revenue and eps is a rounding error.

Moving purchase age up has already been instituted in a couple states and has not affected volumes. Many people under the age of 18 smoke now same will happen if age is 21.

Menthol regulation is not unilateral on the FDAs part and could/will likely take years to institute. Lawsuits will come undoubtedly and those take a long long time. Secondly FDAs stance is to move away from combustible products in general so long term transition to nicotine delivery devices that are not combustible is what is going to happen and MO is ok with it. FDA says menthol e cigs still ok but combustible not. Secondly no mention of chew, move those people over to chew then also and infact MO has submitted MRP application for chew.

In mean time Altria kills competitors (who do you think lobbied FDA on Juul and teenage usage?)and moves nicotine lovers to a noncombustible option.  Its quite clear to alerted FDA to teen usage/flavors, etc. Altria is in FDAs back pocket.

Its my 3rd largest position, one Im most knowledgeable on and will add at 6% div yield.
« Last Edit: November 15, 2018, 01:57:51 PM by orthopa »

obtuse_investor

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Re: MO - Altria Corp
« Reply #2 on: November 26, 2018, 05:21:49 PM »
More Institutional Investors Say No to Tobacco, Weapons

U.S. institutional investors are increasingly screening out securities tied to tobacco and weapons production, cordoning off $4 trillion of investment assets from the two industries, according to a new study.

https://www.wsj.com/articles/more-institutional-investors-say-no-to-tobacco-weapons-1542978000 [pay wall]

See chart from article.
Value Investor who manages his personal portfolio with a 25-45 year time horizon | @obtuse_investor

rb

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Re: MO - Altria Corp
« Reply #3 on: November 26, 2018, 06:06:59 PM »
you wouldn't be able to tell that from the multiples that weapons companies carry.

DooDiligence

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Re: MO - Altria Corp
« Reply #4 on: November 27, 2018, 04:47:49 AM »
It's unfortunate that they spend so much more on dividends than on buybacks.
Imagine what this would look like if the reverse were true.

As long as the unit volume declines in combustible products continue at a measured pace, the cash flows in and the buybacks continue.
And if cigarettes DO fall off a cliff?

---

Lots of people are rebellious & self destructive & the government will continue to battle the cost to Medicare, Medicaid & private insurers.

Regulation favors the incumbents?

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Moist smokeless is roughly 14% of revenues.

Expected new 2018 diagnoses of oral cancer 51,540 = https://seer.cancer.gov/statfacts/html/oralcav.html
Expected new 2018 diagnoses of stomach cancer 26,240 = https://seer.cancer.gov/statfacts/html/stomach.html
Expected new 2018 diagnoses of lung cancer 234,030 = https://seer.cancer.gov/statfacts/html/lungb.html

---

They own slightly north of 10% of BUD (divs are 15%'ish of revs.)

Marijuana COULD be removed from schedule 1 status & the rollups would begin (pun fully intended.)

That's my thesis & I know the dangers (of investing in bad behavior.)
Healthcare 40.8% - ABC BBH CVS DVA EW NVO // BRK.B - 14.7% // Media & Communication 12.7% - CHTR CMCSA DIS

Drinkers & Smokers 13.5% - ABEV MO // Auto's & Oil 13.8% - CLB GPC VDE // Tech & Comms 4.4% - AAPL SFTBY

%'s held @ MV 11/23/2018 minus $$$ 4 skool

ready 2 wait

https://twitter.com/tunawish

Kapitalust

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Re: MO - Altria Corp
« Reply #5 on: November 28, 2018, 01:22:09 PM »
I was buying tons around 6% dividend yield and finished with a full position at 5.97%.

Just released: Altria to take a significant minority stake in Juul.

*edit: should say "... looking to take..." as it's not a finalized deal.
« Last Edit: November 28, 2018, 01:38:49 PM by Kapitalust »

Foreign Tuffett

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Re: MO - Altria Corp
« Reply #6 on: November 28, 2018, 05:47:13 PM »
Well for one getting rid or eliminating e vapor products kills Juul and others that have invested much more time effort to extract that market segment. MO breaks even or loses money on e vapor/MarkTen products not to mention the contribution to revenue and eps is a rounding error.

Moving purchase age up has already been instituted in a couple states and has not affected volumes. Many people under the age of 18 smoke now same will happen if age is 21.

Menthol regulation is not unilateral on the FDAs part and could/will likely take years to institute. Lawsuits will come undoubtedly and those take a long long time. Secondly FDAs stance is to move away from combustible products in general so long term transition to nicotine delivery devices that are not combustible is what is going to happen and MO is ok with it. FDA says menthol e cigs still ok but combustible not. Secondly no mention of chew, move those people over to chew then also and infact MO has submitted MRP application for chew.

In mean time Altria kills competitors (who do you think lobbied FDA on Juul and teenage usage?)and moves nicotine lovers to a noncombustible option.  Its quite clear to alerted FDA to teen usage/flavors, etc. Altria is in FDAs back pocket.

Its my 3rd largest position, one Im most knowledgeable on and will add at 6% div yield.

Does today's WSJ article about Altria negotiating to buy a stake in Juul Labs make you question this thesis? It seems like a "if you can't kill em, join em" type scenario.

Personally, I think the Juul device is the genie that has come out of the vaping industry bottle. It's going to be an uphill battle for anyone to turn back the tide. Keep in mind that, as consumer tech, vaping device improvements will continue at a rapid pace. The vaping industry in the US is only ~10 years old!

DooDiligence

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Re: MO - Altria Corp
« Reply #7 on: November 28, 2018, 06:47:39 PM »
Well for one getting rid or eliminating e vapor products kills Juul and others that have invested much more time effort to extract that market segment. MO breaks even or loses money on e vapor/MarkTen products not to mention the contribution to revenue and eps is a rounding error.

Moving purchase age up has already been instituted in a couple states and has not affected volumes. Many people under the age of 18 smoke now same will happen if age is 21.

Menthol regulation is not unilateral on the FDAs part and could/will likely take years to institute. Lawsuits will come undoubtedly and those take a long long time. Secondly FDAs stance is to move away from combustible products in general so long term transition to nicotine delivery devices that are not combustible is what is going to happen and MO is ok with it. FDA says menthol e cigs still ok but combustible not. Secondly no mention of chew, move those people over to chew then also and infact MO has submitted MRP application for chew.

In mean time Altria kills competitors (who do you think lobbied FDA on Juul and teenage usage?)and moves nicotine lovers to a noncombustible option.  Its quite clear to alerted FDA to teen usage/flavors, etc. Altria is in FDAs back pocket.

Its my 3rd largest position, one Im most knowledgeable on and will add at 6% div yield.

Does today's WSJ article about Altria negotiating to buy a stake in Juul Labs make you question this thesis? It seems like a "if you can't kill em, join em" type scenario.

Personally, I think the Juul device is the genie that has come out of the vaping industry bottle. It's going to be an uphill battle for anyone to turn back the tide. Keep in mind that, as consumer tech, vaping device improvements will continue at a rapid pace. The vaping industry in the US is only ~10 years old!

Anecdotally,
most of the kids I know at school use these things and
you can't drive down the road without seeing clouds billowing out of car windows.

I'm thinking there's more than a few puffs left here and also the optionality of a marijuana roll up scenario.
Healthcare 40.8% - ABC BBH CVS DVA EW NVO // BRK.B - 14.7% // Media & Communication 12.7% - CHTR CMCSA DIS

Drinkers & Smokers 13.5% - ABEV MO // Auto's & Oil 13.8% - CLB GPC VDE // Tech & Comms 4.4% - AAPL SFTBY

%'s held @ MV 11/23/2018 minus $$$ 4 skool

ready 2 wait

https://twitter.com/tunawish

Spekulatius

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Re: MO - Altria Corp
« Reply #8 on: November 29, 2018, 04:22:38 AM »

Does today's WSJ article about Altria negotiating to buy a stake in Juul Labs make you question this thesis? It seems like a "if you can't kill em, join em" type scenario.

Personally, I think the Juul device is the genie that has come out of the vaping industry bottle. It's going to be an uphill battle for anyone to turn back the tide. Keep in mind that, as consumer tech, vaping device improvements will continue at a rapid pace. The vaping industry in the US is only ~10 years old!

I believe this too, mostly because JUUL is the much better nicotine delivery system thet separetess the nicotine from the harmful ingredients of cigarette smoke. The FDA doesn’t like that this has increased the TAM, hence their will be regulation, but I think the product will be here to stay and crowd out the cigarette market.

It will be interesting to see how much MO has to pay of the minority share. I don’t think they do this to kill JUUL either, because if they did, a competing product would just grow the untapped market.
To be a realist, one has to believe in miracles.

DooDiligence

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Re: MO - Altria Corp
« Reply #9 on: November 29, 2018, 05:09:58 AM »
Supposedly, Gottlieb no longer has a financial interest in Kure?

https://www.tobaccofreekids.org/press-releases/2017_04_05_fda
Healthcare 40.8% - ABC BBH CVS DVA EW NVO // BRK.B - 14.7% // Media & Communication 12.7% - CHTR CMCSA DIS

Drinkers & Smokers 13.5% - ABEV MO // Auto's & Oil 13.8% - CLB GPC VDE // Tech & Comms 4.4% - AAPL SFTBY

%'s held @ MV 11/23/2018 minus $$$ 4 skool

ready 2 wait

https://twitter.com/tunawish