Author Topic: PM - Philip Morris International  (Read 108259 times)

Castanza

  • Hero Member
  • *****
  • Posts: 1806
Re: PM - Philip Morris International
« Reply #210 on: September 12, 2019, 05:47:56 AM »
Regulatory capture?  Probably works better for everyone to have a few trusted/regulated dealers versus the wild west.

Yeah I agree from an investment standpoint. If a regulatory body can study this in depth and determine it was something else causing the issues (most likely) then it could help to reduce liability moving forward for PM and MO. Most likely they will never get deemed "safe." But if the government or a trusted regulator deems them "safer than tobacco" then that has to be good.

Question is how long will studies of this nature take?  This political attack is focused on children which is always a prime time attention grabber and heading into elections I imagine this will become a big talking point. Certainly this will have some impact on share price.
Core: MSFT | GOOG | AAPL | INTC | CMCSA | VZ | RTX | MSGS | BATRK | WFC | USB | PNC | BAC | TPL | PPL | PCYO | GRBK | PLNT | ATCO | ESPO | HACK

Funny Money:


jgyetzer

  • Full Member
  • ***
  • Posts: 109
Re: PM - Philip Morris International
« Reply #211 on: October 20, 2020, 04:51:51 PM »
I am looking at the Q3 numbers today.  Combustible volumes are declining and RRP (especially IQOS) volumes are rising rapidly.  The result is declining total revenues but increasing margins with slowly improving overall earnings.  This pattern reminds me of the cable industry as it transitioned from video to broadband as a primary business.  The economic value of the RRP products lines seem to be hidden in the mix, but with the rapid growth it looks like that will become the biggest driver of total revenue and profits within a few years.  Plus, with reduced risk products, the lifetime value of customers are made better not just through higher profitability, but also longevity (helps not to kill your customers).  Has anyone else looked at this?  At the current price, it doesn't seem like much has to go right.

ukvalueinvestment

  • Sr. Member
  • ****
  • Posts: 318
Re: PM - Philip Morris International
« Reply #212 on: October 20, 2020, 11:34:00 PM »
I understand the margin differential is partly because of lower taxes for the next generation products.  I would like to understand if that is anticipated to be a permanent state.
@ukvalueinv

Spekulatius

  • Hero Member
  • *****
  • Posts: 5668
Re: PM - Philip Morris International
« Reply #213 on: October 21, 2020, 03:56:42 AM »
I am looking at the Q3 numbers today.  Combustible volumes are declining and RRP (especially IQOS) volumes are rising rapidly.  The result is declining total revenues but increasing margins with slowly improving overall earnings.  This pattern reminds me of the cable industry as it transitioned from video to broadband as a primary business.  The economic value of the RRP products lines seem to be hidden in the mix, but with the rapid growth it looks like that will become the biggest driver of total revenue and profits within a few years.  Plus, with reduced risk products, the lifetime value of customers are made better not just through higher profitability, but also longevity (helps not to kill your customers).  Has anyone else looked at this?  At the current price, it doesn't seem like much has to go right.

What does PM offer (other than country diversification) that MO doesn’t? MO should have more pricing power (Price for cigarettes in thr US is relatively low) and is cheaper.

 I think what spooked the markets with PM is the 7.6% unit volume reduction which includes IQOS sales. The tobacco market goes up in smoke way faster than historically.
Life is too short for cheap beer and wine.

ukvalueinvestment

  • Sr. Member
  • ****
  • Posts: 318
Re: PM - Philip Morris International
« Reply #214 on: October 21, 2020, 05:54:37 AM »
Spekulatius : I think part of the answer is secular, emerging markets growth.   More people, spending more money smoking and with (on average) less concern for their health than the US consumer.
@ukvalueinv

Castanza

  • Hero Member
  • *****
  • Posts: 1806
Re: PM - Philip Morris International
« Reply #215 on: October 21, 2020, 07:00:46 AM »
It's probably worth owning a bit of both but I tend to agree that PM has more broad exposure to some attractive markets.
Core: MSFT | GOOG | AAPL | INTC | CMCSA | VZ | RTX | MSGS | BATRK | WFC | USB | PNC | BAC | TPL | PPL | PCYO | GRBK | PLNT | ATCO | ESPO | HACK

Funny Money:

K2SO

  • Jr. Member
  • **
  • Posts: 81
Re: PM - Philip Morris International
« Reply #216 on: October 22, 2020, 09:09:03 AM »
I am looking at the Q3 numbers today.  Combustible volumes are declining and RRP (especially IQOS) volumes are rising rapidly.  The result is declining total revenues but increasing margins with slowly improving overall earnings.  This pattern reminds me of the cable industry as it transitioned from video to broadband as a primary business.  The economic value of the RRP products lines seem to be hidden in the mix, but with the rapid growth it looks like that will become the biggest driver of total revenue and profits within a few years.  Plus, with reduced risk products, the lifetime value of customers are made better not just through higher profitability, but also longevity (helps not to kill your customers).  Has anyone else looked at this?  At the current price, it doesn't seem like much has to go right.

What does PM offer (other than country diversification) that MO doesn’t? MO should have more pricing power (Price for cigarettes in thr US is relatively low) and is cheaper.

 I think what spooked the markets with PM is the 7.6% unit volume reduction which includes IQOS sales. The tobacco market goes up in smoke way faster than historically.

The social acceptability of smoking is much higher outside of NA.

On this topic, last year I sat across from someone who was smoking iQOS for an entire evening (in a restaurant in Europe). The second hand smoke does not smell. And so he did not feel bad about smoking it all night, and throughout dinner. He pointed out that while he preferred combustible cigarettes, the no-smell advantage of the iQOS, as well as the supposed health benefits, had sold him on it.

Many smokers I know in the US haven't even heard of this product.

I think there is an underappreciated growth runway for both PM and MO.
 

ukvalueinvestment

  • Sr. Member
  • ****
  • Posts: 318
Re: PM - Philip Morris International
« Reply #217 on: October 23, 2020, 12:40:22 AM »
My view is that if you want to bet on people being addicted to nicotine in one form or another for decades, then MO - as owner of IQOS, the most successful NGP, is the one to own.
@ukvalueinv

JRM

  • Sr. Member
  • ****
  • Posts: 434
Re: PM - Philip Morris International
« Reply #218 on: October 23, 2020, 02:58:29 AM »
My view is that if you want to bet on people being addicted to nicotine in one form or another for decades, then MO - as owner of IQOS, the most successful NGP, is the one to own.

MO has distribution rights to IQOS in the US, but it is actually a PMI product.

ukvalueinvestment

  • Sr. Member
  • ****
  • Posts: 318
Re: PM - Philip Morris International
« Reply #219 on: October 23, 2020, 03:03:51 AM »
My view is that if you want to bet on people being addicted to nicotine in one form or another for decades, then MO - as owner of IQOS, the most successful NGP, is the one to own.

MO has distribution rights to IQOS in the US, but it is actually a PMI product.

Apols - I used the wrong ticker - confused easily.  Meant Philip Morris.
@ukvalueinv