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Jing72, just saw your Dec23 post. Consolidation has been toyed with for years and YES there are some very strong arguments in its favour especially now with the anti-Tobacco lobby in full activity !!
Is this the fallout of BATS revaluation interesting to see that Kenneth Dart has increased his holding to over 10% he also has 6% in IMB. Maybe sector consolidation is on the cards any thoughts anybody?
I see that The Capital Group Companies, Inc. have just acquired another 5% of IMB. They obviously see the dip in the share price as an opportunity to double their holding.
How were they to know which way the sp would go?
I'd expect the SP to rise as we head towards the two bigger dividend payouts & the downside for IMB is that it buys back less shares for the same money. It's a shame they didn't cease the buy backs at 1750p & then use the cash saved to pay down some debt.
Then if the SP drops again next year = buy back more shares at a lower price & repeat the cycle once again.
I dare say you are correct Licancabur. I don't know the maturity dates or coupons on IMB's bonds which would affect the decision. Likewise a comparison of the cost of the debt compared to the "cost" of equity (i.e. dividends). I'd be happy to see both some level of buyback and some debt repayment since both will long-term lead to higher EPS and therefore justify a higher dividend, which is why I am invested.
I've been here for quite a while (2013 I think) and wasn't ever comfortable with Alison Cooper's debt pile of £12.x billion whilst increasing the dividend 10% every year. IMB is on a better path now but I would like to see a continued push towards lower debt because we know that stick volume will fall over time. At the moment they are squeezing as much out of the price of ciggies as possible but there could come a time when they are just so expensive (and heavily taxed) that volumes drop considerably. If that happens you don't want to have much debt on the books as all the company's earnings will be directed that way instead of my way! Control your debts before your debts control you etc.
Guitarsolo I imagine the debt would reduce more quickly if they weren't buying in shares. The board clearly calculate that the value of the buybacks in enhancing eps outweighs the debt burden. Just a thought.
I would add a slight reduction in reported net debt from 8.1bn to 8.0bn (or 8.5bn to 8.4bn adjusted net debt - not sure what the difference is there). Personally, I would like to see debt continue to come down so that eventually more of the retained profit can be paid out as dividends. But overall, a solid set of results.
And yes, the price drops!
Fantastic results. Growth in revenues, significant growth in new products, huge growth in profits. Buybacks and dividend increases.... Happy days. Price will obviously fall...
Price targets are 1835 and 1930. Positive divergence on RSI, indicator and head and shoulders price break, confirms line of least resistance is up. The target of 1930, is calculated from the year and shoulders price formation. IMB, is the relative stronger of the two tobacco charts .
“ciggy companies are doomed”
The one thing we are agreed on. In principle.
Except that prohibition has never worked. Bhutan banned the sale of cigarettes and has since had to re-legalise because it drove smokers to more dangerous, unregulated black market products.
The New Zealand and UK policy of raising the smoking age by one year a year is great on paper. But fraught with unenforceability. In 15 years time what shop is going to challenge whether someone is 29 vs 30?
The truth is that societies face a choice between taxing and regulating the legal or fighting an unwinnable “war” against the illegal.
History shows that it’s always been better to tax and regulate.
IMO, this is what’s wrong with the “war” on drugs more widely.
“ The charts for this are just dire over any time frame since 2016…..these are going to about 12 quid a share, all basket case U.K. dividend stocks are capital destructive but the ciggy companies are doomed.”
Another day, another meaningless rant devoid of insight or fact.
@Trabant - we “salute” the *ahem* “quality” of your contributions.
And forgot from a week ago:
Goldman Sachs raises Imperial Brands price target to 2,280 (2,250) pence - 'buy'
06-Oct-23 Citigroup Buy - - Upgrade
28-Sep-23 JP Morgan Cazenove Overweight - 2,350.00 Reiteration
26-Sep-23 Barclays Overweight 2,500.00 2,400.00 Reiteration
Porsche, stop your nonsense please.
The charts for this are just dire over any time frame since 2016…..these are going to about 12 quid a share, all basket case U.K. dividend stocks are capital destructive but the ciggy companies are doomed.
Down trendline break today, however unlikely to hold above the break , because lowest volume for 2 weeks, and overhead supply from previous trading. A valid trend line break requires to hold for 2 days, so Thursday, tomorrow, should confirm. If the equity retraces, it will likely drop to price range 1680-1730. If tobacco sector chart remains above 28,000, buy IMB, at the lower price range.
I would exoect this share to continue to go up (despite world/uk events) since we are now enter the period when the two larger divi payments are made- no need to be mystic meg with charts and graphs, lotions of bat wing, eye of frog, slime and snails , puppy dogs tails.
The chance to get a quid a share between November and march is all it takes
:)
Sp, has crossed above pricé pivot at 1680.5. If sp, can close above 1680.5, the initial price target is 1730. The tobacco sector chart today, is attempting to overcome the previous higher trough, so if it succeeds that would provide a bullish support, for IMB.
Well they cant use covid and oil any more so you guessed it tobaccooooo is their latest target. I wonder who got the brown enevelopes on this one before its speach. My guess is that this went all the way to the top this time..
Way to go little britain. Whereeeeee getting there.
Why would anyone sell IMB or BAT at these levels ?
The SP in both hasn't just declined, it's crashed !
Both stocks have a fair value price of "well over" what they are now.
Sorry, my mistake , higher trough was 1639.5, not 1649.5. The rest of my comment is valid
My sp, forecast of 4/10/23 has arrived. Sp, has slightly risen above previous higher trough of 1649.5, dated 25/9/23. That trough represents resistance, and since the sp, is in secular downtrend, this is the opportunity to sell, before the equity resumes its down trend . Please realise it does not matter how good the fundamentals are for an equity , when in a confirmed downtrend .The tobacco sector chart has broken through support, which confirms my comment .
"Total capital returns in FY24, including ordinary dividends and share buyback, expected to exceed £2.4bn" So working backwards that's at least a 2% dividend increase on top of the buyback.