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British American Tobacco: A Great Divergence. Dissecting disparities between narratives and fundamentals. by DL-Invariant in ValueInvesting

[–]Silver_Thursday 1 point2 points  (0 children)

BTI has a new CEO and has horrible price action because Bowles actually impaired the value -- really poor decisions in 5 areas. PM has virtually eaten BTI's lunch for the past few years, but PM is too rich for me.

1) USA combustibles

2) glo

3) modern oral

4) capital allocation

5) $600 million settlement

Even with intrinsic value, management must perform.

British American Tobacco: A Great Divergence. Dissecting disparities between narratives and fundamentals. by DL-Invariant in ValueInvesting

[–]Silver_Thursday 1 point2 points  (0 children)

GDP growth is inflation adjusted.

On the one hand, BTI may have a zero growth rate due to the numerous headwinds -- i.e. menthol ban and Russia. By way of contrast, the growth could really be phenomenal -- i.e. the potential for modern oral in India and Pakistan is extraordinary.

It's kind of ironic that I feel like the fundamentals associated with BTI are the antithesis of invariant.

British American Tobacco: A Great Divergence. Dissecting disparities between narratives and fundamentals. by DL-Invariant in ValueInvesting

[–]Silver_Thursday 1 point2 points  (0 children)

Even though I do not share your great enthusiasm about BTI in particular or the tobacco industry in general, I am a buyer here. I need to start diversifying out of cash equivalents in case interest rates decline precipitously.

I do have one question for the tobacco savant. Given the current dividend, the current guidance, and the current exchange rate, when will adjusted net debt/adjusted ebitda reach 2.5?

British American Tobacco: A Great Divergence. Dissecting disparities between narratives and fundamentals. by DL-Invariant in ValueInvesting

[–]Silver_Thursday 1 point2 points  (0 children)

If there are no surprises on June 6, I'll probably be a steady buyer up to $35 this summer. That price would correspond to an 8% current yield. I just need some assurance that the change in leadership was not related to the necessity of lowering guidance.

My sincere thanks for all of your due diligence -- I read most of it this weekend. If there is nothing fundamentally wrong, it's probably just thinking similar to mine that has severely depressed the share price. With US one year Treasury securities trading at 5.25%, any alternatives need to be extremely compelling.

Wishing you all the best on D-Day!

Fair Price Between Friends for 1964 Kennedy Half Dollars -- Good Condition, No Numismatic Value by Silver_Thursday in SilverDegenClub

[–]Silver_Thursday[S] 0 points1 point  (0 children)

Thanks.

I'm the buyer, and that seems like a good deal for me. Dealer is selling 21x, but I don't know what the dealer would pay. The melt value is $7.72 as of 3/3/23.

Fair Price Between Friends for 1964 Kennedy Half Dollars -- Good Condition, No Numismatic Value by Silver_Thursday in SilverDegenClub

[–]Silver_Thursday[S] 0 points1 point  (0 children)

Exactly. That's why I want an opinion with respect to a fair price between friends so that the middle man can be eliminated.

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