Tobacco shares

[Dod101]

Yesterday was a good day for the tobaccos. Not looked today yet.

Dod

[Wizard]

Yesterday was a good day for the tobaccos. Not looked today yet.

Dod

Another 25 days like yesterday and I will be back in the black

Then I just need the other shares in the 90% of my HYP that is underwater to do the same and all will look rosy.

[ADrunkenMarcus]

Imagine this. You find a blue-chip company that offers:

* 21 years of consecutive dividend increases, with the last ten years showing 10% per annum growth;

* Management guidance of further 10% annual dividend growth “over the medium term”, and;

* A share price with a 10% dividend yield.

Too good to be true?

Well, that is the situation at Imperial Brands.

Something to suck on: https://knowledge.sharescope.co.uk/2019 ... al-brands/

Best wishes

Mark.

[Bouleversee]

That was a long and unappetising suck, presumably written before the San Francisco ban. What do we conclude? Seemed to me a long-winded way of saying "wouldn't touch IMB with a bargepole" but then my eyes do tend to glaze over when presented with so many charts, graphs and statistics. Terry Smith seems to have got it right. Perhaps I should buy his fund but I seem to remember that when I looked it seemed horrendously expensive. Hand-sitting as per usual.

[Dod101]

I am not sure what we are supposed to take from the sharescope report but I will probably exit or at least reduce my tobacco holdings if the shares ever return to some sort of 'normal' level. I am not sure that there is a seeable long term future.

Dod

[idpickering]

I found that to be an interesting read thank you. However, it won't change my 'continue to hold' stance on both BATS and IMB, although I'm unlikely to top up further as they're both of 'full' weightings in my HYP.

Ian.

[PinkDalek]

I found that to be an interesting read thank you. However, it won't change my 'continue to hold' stance on both BATS and IMB, although I'm unlikely to top up further as they're both of 'full' weightings in my HYP.

Until they are not "full" weightings, when you'd consider topping-up?

[richfool]

For anyone who likes a bit of confirmation bias, I note that the defensive Personal Assets trust (which aims to protect your wealth), according to its June 30th fact sheet, holds in its top ten holdings:-

BATS - 2.9%
Philip Morris - 2.7%

Though ironically, because of my views on the longer term prospects for tobacco stocks, the fact that PNL holds tobacco stocks puts me off holding PNL.

[idpickering]

I found that to be an interesting read thank you. However, it won't change my 'continue to hold' stance on both BATS and IMB, although I'm unlikely to top up further as they're both of 'full' weightings in my HYP.

Until they are not "full" weightings, when you'd consider topping-up?

I did say unlikely, not never though.

Ian.

[ADrunkenMarcus]

I am not sure what we are supposed to take from the sharescope report

Each individual will simply decide whether to take it into account in their own analysis of whether to buy, hold, or sell tobacco shares such as Imperial Brands. Once they've decided that, they'll have to consider what conclusion they draw from the information in it.

Best wishes

Mark

[Dod101]

I am not sure what we are supposed to take from the sharescope report

Each individual will simply decide whether to take it into account in their own analysis of whether to buy, hold, or sell tobacco shares such as Imperial Brands. Once they've decided that, they'll have to consider what conclusion they draw from the information in it.

I don't think I understand what you mean but I am not criticizing you for highlighting the report, it is just that I am not clear what it is saying.

Buy, Sell or neutral?

Dod

[ADrunkenMarcus]

I am not clear what it is saying.

Nor am I!

Best wishes

Mark.

[Leither]

I sold my tobacco shares some time ago, and indeed most of my HYP shares. The older I get, the keener I am on preserving capital, and now hold mostly ITs and EDFs. But there’s an article in The Times today, “The future of tobacco may be going up in smoke”, basically saying that “Tobacco is a struggling industry which is being regulated out of existence. It’s business model looks increasingly unsustainable.” The World Tobacco Index has fallen 35% in the past two years and Nest, the U.K. workplace pension scheme is disposing of all its tobacco stocks.

FWIW.

Leither.

[Dod101]

Yes Leither. I am inclined to agree with the article although of course the tobaccos could well be a good little earner for some time to come. The trouble is that the earnings as I keep saying are so often at the expense of capital growth and like you I feel that the capital, being hard earned, is worth preserving even at the expense of income. I have been thinking a lot about this recently, and I conclude that for me anyway, I have reached an income level from my dividends that is at least sufficient for my outgoings/needs that I do not need to strive for further income and so am returning to where I came in to this investing lark, trying to find capital gains or, at the very least, not to lose money.

I fear that those who are in the building stage of their HYP may find that they are investing today for investment conditions that were fine two decades ago, but not for today. Be that as it may, were I seeking 'deferred income' as Alaric has correctly put it, I would be looking for total return and not be focussing in on income. The original idea promoted by the now (in)famous pyad was for the retired Doris. So the tobaccos are very obvious candidates for the original idea of a HYP especially at their current levels but as always we need to ask why such big yields are on offer.

Dod

[Leither]

Hi Dod, I have to say I’m more relaxed now that I’m not so concerned about the fortunes of individual shares! As long as the capital fluctuations of my ITs etc aren’t dramatic I’m quite content. Plus my collective investments are much more geographically spread than my previous HYP which, for me, is much more reassuring in these strange times.

Regards,

Leither.

[richfool]

I sold my tobacco shares some time ago, and indeed most of my HYP shares. The older I get, the keener I am on preserving capital, and now hold mostly ITs and EDFs. But there’s an article in The Times today, “The future of tobacco may be going up in smoke”, basically saying that “Tobacco is a struggling industry which is being regulated out of existence. It’s business model looks increasingly unsustainable.” The World Tobacco Index has fallen 35% in the past two years and Nest, the U.K. workplace pension scheme is disposing of all its tobacco stocks.

FWIW.

Leither.

Yes, loads in the Times and the Daily Mail yesterday saying similar things. Tobacco is on the way out.

(It frustrates me that defensive wealth preserver Personal Assets trust and cautious Bruce Stout's Murray International trust both hold tobacco stocks. But understood that maybe off topic for this board).

[Dod101]

To be practical I think it depends on your time horizon. The whole of the tobacco industry will not I think disappear over the next decade or so which is really about all that I am interested in. Were I a younger guy, say middle age looking to retirement but still in the building phase I would not be buying the tobaccos. They will, though, l I think still be churning out dividends for some time to come. Of course if we still have pension funds and suchlike selling, then that will keep pressure on the price and prevent any meaningful uplift, until that selling is over at least.

I will just hang on and try to forget them for a while.

Dod

[CommissarJones]

BATS (I hold) gets the John Kingham treatment.

[Dod101]

BATS (I hold) gets the John Kingham treatment.

I hold both tobaccos. John Kingdom has not exactly given us anything new. What he says, anyone who has followed the tobacco companies knows already. If that is the John Kingdom treatment it is not very effective, |I am sorry to say.

Dod

[Bouleversee]

Hilarious that San Francisco is banning vaping whereas the NHS is going to sell the devices in hospitals in order to help people to give up smoking.