The Lemon Fool

at £43.98, BATS is almost at a 4% yield too

Factor in a 10% dividend increase on IMPs and the yield would be 7.2%...

monabri wrote:at £43.98, BATS is almost at a 4% yield too

Crazy isn't it?

Ian.

Well, they say the market knows best... what don't we know?

monabri wrote:at £43.98, BATS is almost at a 4% yield too

Factor in a 10% dividend increase on IMPs and the yield would be 7.2%...

In the mean time I'm happy to take that yield. (IMB). I have no intention of selling.

Ian.

idpickering wrote:

monabri wrote:Now at £26.05. approx 6.6% yield.

I see that monabri, thanks. They're down 2.3% currently, heaven knows why? ...

I haven't read this or other Topics in full but the brief reasons must include the ongoing potential problems:

1. The lack of the Japan Tobacco takeover/merger.
2. The threatened USA litigation/FDA legislation.
3. Going out of fashion.
4. Market jitters etc.

I've held Imperial since they demerged from Hanson. TJH might tell us when that was but it was about 1996. I downsized once in 2008 or thereabouts, as I need cash for something else. I'd always intended to continue downsizing, as it was one of my two oversized holdings but the larger one took preference in using up my CGT annual exempt amount. I think I've lost about 35% over the last 12 months and that amounts to a considerable sum.

The dividend yield is, of course, impressive and I can't say I don't enjoy the quarterly dividends and I'm aware this is High Yield Portfolios (HYP) - Practical.

Would I top up?

Most definitely not but I'll probably continue to hold for the time-being.

PD -

Could you please remind us (me, anyway) what the litigation/legislation is all about. I was just about to bed and isa some IMB shares as I don't have a large holding myself. My daughter is in the same boat as you. TJH has been proved right as regards top slicing. I have always tended to stick with my winners but all their prizes seem to be disappearing fast.

Litigation - This is covered in the Annual report 2017

http://www.imperialbrandsplc.com/conten ... 171207.pdf


As part of their risk register, They have a section on "Tobacco litigation ". They describe the risk on page 27 of their report (note,page 27 of the report is not the same as page 27 when you open up the pdf file link above).

From page 27

"To date, no tobacco litigation claim brought against the Group has
been successful and/or resulted in the recovery of damages. "

But the risk is that case are brought against them if they don't comply with the countries rules.

They discuss individual cases (by country) on page 50 of their report.

So, there is a risk that they might slip up and not follow the rules....hence there is a risk of litigation.

Many thanks for that link, Mon. Unfortunately, it is quite impossible to read the text on my laptop and if I use a magnifying glass it is just blurred. Perhaps I'll demand a hard copy in future. Anyway, from your quote it didn't sound as though the risk from litigation was too severe. What about the FDA legislation?

28 July 17

http://www.londonstockexchange.com/exch ... 10400.html

"The US Food & Drug Administration on Friday announced a new "comprehensive plan" for tobacco and nicotine regulation that will "serve as a multi-year roadmap to better protect kids and significantly reduce tobacco-related disease and death"

As I understand it, one element will be to reduce the nicotine levels in an effort to reduce addiction and to make it easier to kick the habit.

PinkDalek wrote:I've held Imperial since they demerged from Hanson. TJH might tell us when that was but it was about 1996. I downsized once in 2008 or thereabouts, as I need cash for something else. I'd always intended to continue downsizing, as it was one of my two oversized holdings but the larger one took preference in using up my CGT annual exempt amount. I think I've lost about 35% over the last 12 months and that amounts to a considerable sum.

The dividend yield is, of course, impressive and I can't say I don't enjoy the quarterly dividends and I'm aware this is High Yield Portfolios (HYP) - Practical.

Would I top up?

Most definitely not but I'll probably continue to hold for the time-being.

The demerger was on 01-Oct-1996, and the demerged price was 375p. I added to them in March 1997 at 417p, in November 1997 at 369p and in May 1998 at 440p.

Then in April 2002 I sold the rights and trimmed back my holding in June at 1083p.Trimmed again in March 2003 at 986p and in March 2007 at 2323p. A further trim in January 2008 at 2669p was followed by selling the rights in June 2008. I topped up in July 2013 at 2279p and again in August 2013 at 2233p.

In February 2016 I trimmed again at 3579p, and topped up in October 2017 at 3130p.

The dividend has risen from an original 21.4p to the current 170.72p, and the XIRR works out at 21.0%. IMB is currently top of my rankings for topping up, perhaps at the end of the month, but that might be pre-empted if Segro rises relative to the median, currently BAE Systems.

No reason to contemplate a disposal. My current holding is about 60% of the shares after the top-up in March 1997 and 50% of the maximum held in 1998.

TJH

monabri wrote:28 July 17

http://www.londonstockexchange.com/exch ... 10400.html

"The US Food & Drug Administration on Friday announced a new "comprehensive plan" for tobacco and nicotine regulation that will "serve as a multi-year roadmap to better protect kids and significantly reduce tobacco-related disease and death"

As I understand it, one element will be to reduce the nicotine levels in an effort to reduce addiction and to make it easier to kick the habit.

Ah yes, that does ring a bell now. Thank you. So will that make addicts give up the habit and go somewhere even more dangerous for their kicks/stress busters or will they smoke 3 times as many to get the same effect? I did resist the temptation for many years (to buy the shares, not the products, that is, for ethical reasons) but when I saw how well my daughter's holding had done I weakened and bought a few, persuading myself that nobody would smoke any more or less whether I bought or not. Difficult to know what to do now. I am losing on the ones in my ISA and don't know whether bed and ISAing the others will reduce or compound the loss. I note that TJH doesn't seem worried, so perhaps I shouldn't be. The daily decline is, however, a bit strange.

Just seen this on the rather late ADVFN Evening Markets Bulletin (FWIW)

"Imperial Brands was under the cosh on Tuesday as Piper Jaffray cut the stock to 'neutral' from 'overweight' and reduced the price target to 2,800p from 3,500p, highlighting a cheap valuation but a modest earnings per share growth outlook.
The US investment bank said it expects further reinvestment spending to weigh on EPS growth as the company expands in vapour and considers a heated tobacco launch.
"The stock trades at just 10x our 2019E calendar EPS, but this looks less attractive relative to modest EPS growth (we estimate 1% 3-year growth), especially without a proven heated tobacco platform (which we consider a much bigger opportunity than vapour, Imperial's focus to date)."
Piper Jaffray cut its FY18 EPS estimate to 260.5p from 265.7p and its FY19 forecast to 266p from 294p.
It said that while Imperial hasn’t actually committed to a heated tobacco launch, there is a risk to FY19 EPS growth from likely launch investments, as rival Philip Morris's momentum with electronic tobacco device IQOS makes it too difficult to rely on vapour products alone."

However, since they closed today at 2600.50p that would still be an improvement.

Keep calm and carry on. Apart from anything else if you ditch tobacco, support services and utilities there is not much choice left is there?

Dod

Dod101 wrote:Keep calm and carry on. Apart from anything else if you ditch tobacco, support services and utilities there is not much choice left is there?

Dod

And didn't we ditch oils and retailers and most banks?

Not that a bear won't eat for breakfast.

Dod101 wrote:Keep calm and carry on. Apart from anything else if you ditch tobacco, support services and utilities there is not much choice left is there?

Dod

You left out Retail, Dod. Am losing several thousand there as well. Looks as though Mothercare which I have held for many years might be going bust too. The almost £5k I had invested there is now worth £397.80. I also have M&S, Next, N. Brown, all the supermarkets and Card Factory, Burberry, Greggs & WH Smith. The last 3 have done well but may have slipped a bit recently and in general people don't seem to be spending or drinking (my Marston's also down a lot). I note that the Australian firm which took over Homebase has written off their investment and more. Miners have been disastrous for me, also, and builders are also down and not as attractive as they were. There really is very little left that I do feel confident in investing in. As you suggest, IMB may be as good as anything, though insurance might be safer. I haven't sold any of my own shares so will just hope for a recovery in due course, after transferring to ISAs at the lower prices (so far, they've gone even lower after transfer however) and a continuation of the income in the meantime; I shall endeavour to spend or gift that to charity and family, what's left after higher rate tax this year, that is. Having started to read the Polite Discussions thread on what might happen if Corbyn gets in and what investment strategy to adopt, I see absolutely no point in saving any more.

It's taken them a while to change their view from £35 per share to £28!

IMB was at £35 on June 29 2017. Then, ~8 months later with the share price at £26 they issue a price target of £28.

Not really much use if you ask me and it would make me wonder about any of their other price targets (if I thought

for one minute they were of use......which I don't).

Ah well, XD next week!

at the moment the market is punishing anything that has flat forecast earnings, no matter what the underlying quality of the business is. look at the likes of card factory / next for how swiftly the 'experts' change their tune.

remember that for the past few years IMB have been paying down billions of normalised debt, and acquired some very attractively priced brands in the U.S.

there is no doubt PMI and BAT are better placed for the long term, but the question is what valuation premium do they justify?

as i said before, as long as IMB continues to pay down debt and increase the dividend, i will happily hold. the valuation is so depressed i may even top up a modest amount.

Broker forecasts for IMB

http://investing.thisismoney.co.uk/brok ... rands.html


I wonder if there is a website for Lottery Forecasts?

I note that Piper Jaffray (who they?) are not included in that list. As you suggest, they probably have no more idea than we do. Anyway, none of them has suggested selling ... yet. That will change, no doubt, after I have done the bed&ISA. Just trying to decide whether to sell first or buy in the ISA first in the present volatility. I shall probably lose on price change as well as spread and costs but the saving on tax on the div. will offset that.

One thing that does cause me concern about investing in Imperial, is the amount of chat that we've had about them here. Onto our sixth page now. Worryingly like our lengthy chats about Carillion . Although I can't see IMB going to the wall.

Ian.