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Any ideas on the cause of the decline?
Share price down probably for the usual ESG reason, maybe funds reducing exposure ? With the recent great results and very high div., surely unlikely to be PI's selling ?
Yep,
looks like its being walked down.
How low will it be taken is the big question?
RSI continues to fall.
Its not unusual for BATS if you look back over the TA chart.
I'm watching and waiting for a suitable entry for a trade.
too many brokers rate this as a buy? what if the dividend gets cut?
Dividend get cut? Why would you even say that! Have you seen the latest results and increased dividend over the last few years?
I read a Morningstar or it may have been HL article recently looking at ESG ratings. It detailed the 3 FTSE100 companies with the best ESG ratings, and BAT were in it.
Can't remember the detail, presumably they score well on employment of women in high positions, they support local communities in frontier countries, they grow a crop which takes CO2 out of the atmosphere. I think there is a great scope for some good PR there
I think the weakness since the result has something to do with a strong pound over the past week or so. BAT makes most revenue in dollars so a strong pound doesn't help.
The dividend is growing from 48.8p quarterly in 2019 to 53.90p quarterly in 2021 ?. Not cut!
My opinion bats is now a trading share . It has been for a while. It’s in a range and the best strategy is to buy between £24/26 and sell out before the divi date. Summer months with no volume will provide an opportunity to buy on weakness. Cigs are like oil unloved and no matter how good growth is from future products, it’s going to be unloved and kicked at an opportunity. So I just invest for a 3 month cycle tops.
its a high paying dividend stock why should the sp rise. tomorrow may present a buying op. it'll be 3 days down? it bounce a little today but there was resistance at 2670.
Finley....
been doing exactly the same for a few quarters now
Buy on lows.......sell on rise to XD & forego the divi
Go for the cap gain
Pig
Bought in a few weeks ago for the 7% divi and I’m now 7% down. Bit of a dog so far.
Hey RR that's my investment strategy. Seriously, shares are designed to confuse and infuriate. All sensible metrics such as PE, profitability, and debt have been abandoned in favour of fairy tales. Welcome to the parallel universe of Tesla, Bitcoin and Monzo.
I have been slowly buying a pretty large position in this company over the last 6 months and continue to buy more at it reaches new lows. I view it as an interesting experiment to see whether I can get my investment back in dividends before the company goes to zero.....anything received in excess of this will be my profit!
If BATS can maintain its current profits with no increase whatsoever, I should get my money back within 10 years. Any residual value after this will be pure profit. Given that the company is actually still increasing its profits and revenue, this seems like a decent bet. Contrary to what many people believe, the number of smokers in the world is actually increasing currently due to population growth, not to mention that some proportion of future profits will be coming from non-combustibles which in theory could generate profits into perpetuity.
I think its pretty clear that you are getting a huge discount here for a company that others are unwilling to buy at any price due to the harmful product it sells. There is just simply very little demand from institutional investors due to the absurd suggestion that they are being socially responsible by not owning tobacco shares. Even if the shares fell 99% with no reduction in profitability, these institutions would still be unable to buy the shares.
The ESG effect weighed heavily on BATS over the past few years,
but it does seem to have found a more stable trading level for the time being.
The II's who were divesting due to ESG seem to have finished parting ways with BATS,
to hopefully be replaced with major shareholders who have profit and returns as their primary focus.
There is some useful information regarding major shareholders
in the latest BATS company accounts (up to 31 Dec 2020) filled here:
https://find-and-update.company-information.service.gov.uk/company/03407696/filing-history
Share holder info begins on page 326 of the accounts report.
UK shareholder register 31st Dec 2020.
36648 shareholders of 100% of UK ordinary share capital.
307 shareholders held over 500,000 shares each.
307 shareholders held 85% of UK ordinary share capital.
Major holders of issued share capital included:
The Capital Group Companies Inc
BlackRock Inc
Spring Mountain Investments Ltd
Some further BATS info here:
https://www.marketscreener.com/quote/stock/BRITISH-AMERICAN-TOBACCO-4001163/company/
However the pressure on cigarette sales in the UK has not ended:
"MPs have called for a consultation on raising the age for the sale of cigarettes to 21 from 18 in order to end the “tobacco epidemic” by 2030."
"The cross-party group of MPs and peers has warned the government that it can only build back “better and fairer” from the pandemic by making smoking obsolete and must commit now to the actions needed to secure its vision of a Smokefree 2030."
https://www.theguardian.com/society/2021/jun/09/uk-smoking-raise-age-cigarettes-sale-to-21-mps
https://www.independent.co.uk/news/health/smoking-age-limit-cigarettes-21-b1862375.html
Always DYOR.
SP still seems to be walking down.
Any views on where it might bottom out?
2600?
2575?
Lower?
My guess is this could drift down to the all time lows around 2400p and bounce around there for a while. I can't see it dropping below that without a dividend cut or a big fall in earnings (which I believe to be unlikely to happen).
Personally I don't think we will see a significant move upwards until share buybacks resume....hopefully in early 2022. However, between now and then I would take any drop from here as an opportunity to add to your holding.
If there was ever a situation where buybacks make sense - this is it!! Personally I would rather they forget about trying to reduce the net debt and just buyback shares now. In the current interest rate environment it really doesn't make sense to repay debt, especially when the business is being valued at significantly less than 10x earnings!!!
The madness of it all is that they increased debt to way over 5x to acquire Reynold back in 2017 at multiples double what BATS is being valued at now, however now that the share-price of BATS has halved they think that repaying debt is a better use of funds! Arrrgh
Anyway, the latest announcement did confirm they are on track to reduce net debt to 3x by the year end, so hopefully we won't have to wait much longer for them to introduce a more sensible capital allocation policy going forwards!!!
I opened a position in IMB around the same time as I did in BAT. I am in the black with IMB, but 7% down with BAT, so the problem seems to be with the company, rather than with the industry as a whole. Hopefully this is a temporary phenomenon.
Support at circa 2650 has held for 4 days now,
but will it last?
If you draw a trend line from the Oct 20 low,
through the Feb 21 low,
and extend it into Aug-Sept 21,
it suggests a possible low of circa 2570 towards late Aug.
For now I'm still waiting in case support breaks and SP continues downwards.
Ex-divi at the end of Sept.
Always DYOR.
Rogue, I also hold both IMB and BATS (high income ISA portfolio) having worked for Philip Morris back in the early eighties. Happy to take the 54p div in mid May and also 54p next week in BATS and have taken a 3 year view on both companies but check the results as they are released.
And it would appear that an institution has just upped its stake in the Company. Have I read that correctly ?
Yes it seems that way :-)
SP revisited 2650 again today.
With a yield of over 7% and Spring Mountain Investments Ltd having increased their holding (see RNS),
it's a very tempting trade target,
but still a little concerned from the TA that it might dip a slightly lower.
So still waiting!
Last week finished strong,
2650 support held again.
RSI continued to rise.
Bought in this morning at 2725.
Current yield over 7%.
Ex-divi at end of Sept.
Always DYOR.
Good news for BATS share holders,
but very bad news for the health of the nation!
"The number of 18-34 year-olds who smoke increased by 25 per cent in England during the first lockdown, according to a study conducted by the University of Sheffield and UCL published today (25 August 2021) in the journal Addiction."
https://www.sheffield.ac.uk/news/surge-smoking-among-young-adults-during-lockdown
https://news.sky.com/story/smoking-among-young-people-increased-by-quarter-during-first-covid-19-lockdown-12389992