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British American Tobacco - Second Half Pre-Close Trading Update 2018

Practical discussions about equity High-Yield Portfolios (HYP) for income
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idpickering
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British American Tobacco - Second Half Pre-Close Trading Update 2018

#186271

Postby idpickering » December 12th, 2018, 7:03 am

Trading update - ahead of closed period commencing 1 January 2019

· The business continues to perform well and full year guidance remains unchanged

· Continued good market share growth in combustibles, driven by the Strategic Brands

· Strong growth across THP, Vapour and Oral (PRRP) categories

· The US is performing well with volume in line with expectations

· De-leveraging remains on track

· Remain well placed to manage US regulatory proposals


https://www.investegate.co.uk/british-a ... 00031733K/

idpickering
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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186272

Postby idpickering » December 12th, 2018, 7:07 am

Not much to fret about with this announcement I think. I mentioned before that BATS was my chosen top up for this month, that is still the case.

Ian.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186314

Postby Dod101 » December 12th, 2018, 10:03 am

Thanks Ian. I see the tobaccos are well up this morning, probably for good reason. Were it not for these pesky US regulators...............

Dod

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186317

Postby idpickering » December 12th, 2018, 10:18 am

Dod101 wrote:Thanks Ian. I see the tobaccos are well up this morning, probably for good reason. Were it not for these pesky US regulators...............

Dod



You're welcome Dod. BATS are up 2% as I type. I did top these up a few months back, and don't mind taking another bite out of their apple. As for the regulators, reading the above, they seem to be managing that matter.

Ian.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186320

Postby Arborbridge » December 12th, 2018, 10:21 am

Government in crisis, pound down, possible leadership election - stock market up - what the heck?

Arb.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186327

Postby Quint » December 12th, 2018, 10:46 am

I recently added BATS to the income section of my SIPP to join Imperial Brands.

idpickering
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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186332

Postby idpickering » December 12th, 2018, 11:12 am

Quint wrote:I recently added BATS to the income section of my SIPP to join Imperial Brands.


That’s a good move imho. I’ve held the pair of them for years. Hedging my bets between them In the process.

Ian.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186344

Postby Dod101 » December 12th, 2018, 11:46 am

Arborbridge wrote:Government in crisis, pound down, possible leadership election - stock market up - what the heck?


Of course part of the 'up' in the stockmarket will be because the pound is down. As for the Government in crisis well that is not really new and I wonder how much of that factor is already priced in to the stockmarket? But I agree that is a weird state of affairs.

Still, it looks as though we can look forward to another increase in the dividend from BAT as it seems very much business as usual for them, despite the dramatic fall in the share price.

Dod

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186361

Postby jackdaww » December 12th, 2018, 12:41 pm

its good to see that at least a dozen popular HYP stocks are holding up reasonably well , some are actually looking quite good.

8-)

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186417

Postby Walrus » December 12th, 2018, 5:48 pm

Yep plenty of deeply unpopular stuff seems to be relatively stable.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#186444

Postby Quint » December 12th, 2018, 7:52 pm

idpickering wrote:
Quint wrote:I recently added BATS to the income section of my SIPP to join Imperial Brands.


That’s a good move imho. I’ve held the pair of them for years. Hedging my bets between them In the process.

Ian.


My only worry is that after selling out a year or two ago Mr Woodford has recently bought back in to BATS. I hope that is not a bad omen :D

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190719

Postby Dod101 » January 3rd, 2019, 8:14 am

Seeing the dismal performance of BAT in 2018, Woodford got his sale correct so you never know he might be right in buying in again. I am still in shock when I see the 50% loss on BAT over the year. It now yields about the same as Imps so maybe it is about right and the peak of over £50 was simply froth. Anyway I suppose we ought simply to be glad that the dividend is holding up well enough. It looks oversold but I will not be buying any more.

Dod

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190725

Postby idpickering » January 3rd, 2019, 8:35 am

Dod101 wrote:Seeing the dismal performance of BAT in 2018, Woodford got his sale correct so you never know he might be right in buying in again. I am still in shock when I see the 50% loss on BAT over the year. It now yields about the same as Imps so maybe it is about right and the peak of over £50 was simply froth. Anyway I suppose we ought simply to be glad that the dividend is holding up well enough. It looks oversold but I will not be buying any more.

Dod


I still think BATS are a mainstay in my HYP. Having topped up last month, I'm unlikely to top up again, as I'm 'fully' invested in them.

Ian.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190728

Postby jackdaww » January 3rd, 2019, 8:43 am

i am still dripping cash into BATS.

8-)

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190729

Postby Arborbridge » January 3rd, 2019, 8:44 am

Dod101 wrote:Seeing the dismal performance of BAT in 2018, Woodford got his sale correct so you never know he might be right in buying in again. I am still in shock when I see the 50% loss on BAT over the year. It now yields about the same as Imps so maybe it is about right and the peak of over £50 was simply froth. Anyway I suppose we ought simply to be glad that the dividend is holding up well enough. It looks oversold but I will not be buying any more.

Dod


People rarely miss a chance of knocking Woodford but he may be right on this one. In any case, it should give potential BAT buyers some confidence. Very British to knock the successful: the Brits pull people down a peg or two: the Americans lionise them. Could that feed back into national success or failure?

Like everyone, I was pretty amazed to realise how much BATs had fallen from grace. It is now No 2 in my top-up table, and that seems quite strange. The market is a weird place anyway just now and it wouldn't surprise me if the FTSE went below 6000, so for the moment I am trying to resist temptation until after B-day at least. Well, perhaps just a little morsel here and there.....
As ever, the problem is: so many sweets to choose from now the shop is open.

Arb.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190770

Postby idpickering » January 3rd, 2019, 11:43 am

This from TMF today highlights BATS;

Wide margin of safety

Sage aside, I see so much value on offer across the board that it’s hard to highlight any one of the nine stocks for special attention. British American Tobacco (BAT) is perhaps the most eye-catching, having the lowest P/E by some margin at 7.9 and with the second-highest dividend yield at 8.5%.

Tobacco stocks in general have fallen out of favour over the last year or two, but BAT has been hit particularly hard by adverse investor sentiment. It’s suffered not only from sector-wide concerns about regulation, but also from its much higher exposure than its peers to the US menthol cigarettes market. Regulators there are looking at banning menthol cigarettes. Another concern about the company is its current relatively high level of debt, following its $49bn acquisition of Reynolds American.

With investors shying away from the sector and the firm having company-specific issues to boot, its shares have fallen considerably further than those of its rivals. They’re currently 56% down from their all-time high of 5,643p in the summer of 2017. But I think the market’s being far too pessimistic about the company’s future.

The menthol cigarettes ban in the US is unlikely to happen for years, if ever, while the company’s debt-reduction plans look perfectly plausible to me. Moreover, with its share price having been hammered down to the extent it has, it offers a wide margin of safety against any future earnings setback.

https://www.fool.co.uk/investing/2019/0 ... portfolio/

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190857

Postby monabri » January 3rd, 2019, 5:12 pm

At the moment, tobacco is "controlled" by the big companies and that has been the way smokers got their nicotine hit. However, what is the threat on sales to BATS /IMB from the many e-cig shops that are on the high street? Who controls the raw ingredients that these e- cig shops are selling?

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190864

Postby Arborbridge » January 3rd, 2019, 5:26 pm

monabri wrote:At the moment, tobacco is "controlled" by the big companies and that has been the way smokers got their nicotine hit. However, what is the threat on sales to BATS /IMB from the many e-cig shops that are on the high street? Who controls the raw ingredients that these e- cig shops are selling?


Big tobacco is moving into that area, and I'm sure will try to use their muscle to tie it all up if that is possible. It remains to be seen whether they can adapt to the new situation. Change is always dangerous for investors - sectors can die almost overnight, as in the oft quote case of the invention of the telegraph.

On a similar theme, I notice Shell is getting further into wind power, intending to big for more seabed allocations for turbines.

Our companies are constantly under threat and one has to trust they can adapt, which is where the idea of SI comes in 8-)

Arb.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190928

Postby idpickering » January 4th, 2019, 5:21 am

Good post Arb, I agree with you. For me, let the managers manage.

Ian.

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Re: British American Tobacco - Second Half Pre-Close Trading Update 2018

#190935

Postby Dod101 » January 4th, 2019, 6:53 am

I do not know what is meant by an e-cig shop, but I cannot bring myself to add to my BAT or Imperial Brands at this time, even although I have some funds to invest. I will let them do their own thing and see what happens.

Dod


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