The Lemon Fool

I suppose this could apply to any of the Tobacco companies, but it seems the future potential can be summed up in 2 questions

Is the ability to grow revenue despite reduced volumes reaching a point where this trend is no longer sustainable? Many reasons to think why this would be the case, with volumes declining at increased rates and regulatory threats potentially supercharging this reversal.

Can New Generation Products replace this falling revenue? Recent growth figures and all the predictions I can find on the internet seem to suggest that the answer is yes, but this remains the great unknown. It certainly appears that there will be ups and downs on the journey.

It’s a bit like investing in a fast growth company, albeit one with a highly profitable cash cow attached!

Except, I meant to say, that the fast growth company might turn out to be a complete dud.

The other risk for big tobacco is that the move to Vaping may allow new entrants in to take market share. This is already happening with Juul

Not hard to see why big tobacco shares have fallen heavily

scrumpyjack wrote:The other risk for big tobacco is that the move to Vaping may allow new entrants in to take market share. This is already happening with Juul

Not hard to see why big tobacco shares have fallen heavily

Yes, it's interesting to look at what the two bits of the former Phillip Morris have done since splitting.

PM is the non-US part - basically a cash cow from selling Marlboro in Asia etc.

MO is the domestic part and, since tobacco is in terminal decine, has been branching out into vaping and marijuana.

So far the PM cash cow has been the better place to be. Too much competition and regulatory risk for the speculative stuff in my view and the market's view.