Member Info for alex1621

The main positive about anyone making statements on a board that might be false and/or market moving is that they will not influence anyone to take action ... as the shares are not trading currently, no one can buy or sell.

Impossible to answer your question, really. I bought in pre dividend last time round and it fell only to recover well above my entry price, so I got dividend plus capital gains. Roughly three month holding. So if you don't wish to buy and sell within a couple of weeks it might work out well.

The SP is suffering from profit warnings, negative sentiment about tobacco and regulatory issues around vaping. Any positive news will see a re-rate. Tobacco is in decline but that will take a very long time (years) to play out. My personal view is that IMB is undervalued.

The most authoritative commentator on buybacks would be Warren Buffett, and he's generally in favour of them as long as the shares are bought back at a price below "intrinsic value", which is more of a range than an absolute value. Purchasing above intrinsic value is harmful to shareholders. In my personal view IMB has been under a cloud of sentiment that has effectively pushed then SP below intrinsic value, and therefore buybacks at this level make sense. Reducing the debt is admirable but would not be as effective as buybacks as the yield on dividends is far higher than the interest on the debt. The sale of the cigar business is likely to see a sizeable chunk of debt reduced. Debt reduction can and should be managed down over a few years.

I recall that Glencore fell to around 85p a few years back, driven by sentiment and debt concerns. It's now 247p and was up at 400p at one point. Within 12 months of the low point it hit 300p. It turned out that the sentiment was overplayed? There are countless examples like this. Clearly Glencore was undervalued at 85p, but it wasn't so obvious to market participants driven only by price level.

If you bought the shares before the ex dividend date of 21 Nov 2019, you are entitled to the dividend to be paid on 31 Dec 2019. So if you bought yesterday or before that date you are entitled to the dividend. If you buy today you are not entitled to the dividend. If you bought on or before 20 Nov 2019 and decide to sell today you will still be paid the dividend on 31 Dec 2019.

It’s also important to acknowledge that their shorts don’t always pay off ... as Bill Ackman discovered at Herbalife. There’s a gloomy narrative overhanging tobacco at the moment, or at least more than usual. However, there are dangers too ... any positive news on US vaping, sale of Cigar business and application of the resources, not to mention sales and profits that might outperform recent guidance ... not to mention the possibility of a takeover attempt with weak Sterling and a vulnerable management team. So not a slam dunk short in my view.

The dividend for 2020 is covered by cash flow, as confirmed recently by the Finance Director. He also signalled more cash is coming from the sale of the cigar business, so expect debt reduction and more buybacks. Any positive news on vaping will also boost sentiment. The arch critic analyst from RBC suggested recently that the company may be understating forecasts slightly, so perhaps we’ll see actual ahead of guidance? There is negative sentiment around tobacco and vaping, but bear in mind that hedge fund shorts and longs can and do go wrong at times, as Bill Ackman found outwith Herbalife and Valeant respectively.

It might also be connected to a Tory election win and a boost for GBP, like a reversal of the Referendum when $ earners performed well. Even the worst critic at RBC suggested that IMB are possibly under promising with their forecasts to surprise with results ... I'm watching for the sale of the cigar business, which will be used in part to reduce debt levels. I observed these last few days that BAT was positive whilst IMB was much poorer, so Marshall Wace may well be long BAT, short IMB.

Looks like Trump is being given something to think about regarding the vape ban ... his job!

https://www.zerohedge.com/political/could-vape-users-sway-presidential-election

Indeed, in the presentation the Finance Director was pretty confident about 2020 dividend and even more so about 2021, as some one-off expenses dropped off. The next big announcement is on the sale of the cigar business, with the money directed to debt reduction, and I’d guess further buy backs. The core business looks solid and the Vaping issue should clear after the US authorities put regulation in place, which is good for established firms but not so good for new entrants. So I’m not buying into the overly gloomy sentiment. Markets are generally efficient and most prices are close to were they should be, except in times of excess optimism and pessimism. I think that is what we are witnessing now. A couple of years ago an analyst won some headlines stating that Next was having a “Kodak moment”, being killed by its stores ... SP was done below £40. It was over £60 not so long ago and it appears that the headline grabbing opinion was wide of the mark. I thought at the time it might have been done for a client. I felt the same with RBC.

The company has dropped the 10% increase policy, so going forward dividends will be related to earnings and cash flows. Given the current CEO is leaving as is the Chairman I'd guess you won't see any radical policy change until a new CEO is appointed. With a relatively low GBP, a falling SP and a company in-between management it looks vulnerable to a takeover attempt. If there is no revelation on 5 November I'd say it's looking incredibly good value.

Your argument only really makes sense if you believe that selling price always reflects intrinsic value. The problem with that is that it isn’t always the case, particularly when sentiment is overly optimistic or pessimistic. A recent example was Glencore, which fell to around 85p at the end of 2016, and ended 2017 at 300p, where it was in the early months of 2016. Such examples arise time and again in the stock market. I bought 888 several years back at 56p and it fell to the early 30’s. At the time an analyst assessed the company at 18p. I sold at 170p and if I’d have held on a few years I could have sold around 300p. This happens time and again. Markets are generally efficient, but can get too optimistic and pessimistic at times on individual shares.

The extreme price target change from £21 to £16 might explain the SP reaction. What puzzles me is why an analyst would publish such an outlier view one week before a company announcement? It would make more sense to wait for the update in case of a positive surprise, and adjust accordingly. Perhaps it was done to support the interests of a client ... I simply don’t trust analyst statements.

"Family loyalty is paramount to most"

I wonder if Boris has given his brother assurances about his approach to Brexit, and then gone back on his word, something he has form for?

He's not the man precisely because he wants to see Brexit happen, as much as Boris Johnson.

The tax bill and failure of HoF is well covered, but what was the statement about drug tests to prevent the risk of blackmail? That's got to be one of the most bizarre statements ever to come out of a company statement. Swiftly followed by the departure of the CFO? Ashley also called into question the quality of City advice they had received, can it be presumed that the due diligence reports were defective, motivated by the prospects of fat fees? Bizarre ... leaves the impression that the CFO compromised himself in some way ... and why mention drugs tests? Bizarre.

Maybe it was our very own "Poundland Churchill" Boris Johnson?

I presume the "open sea" refers to trade outside Europe? The idea that you can either trade within Europe or outside it? Yet the Scotch Whisky industry is selling around the world, as is Burberry, BAT, HSBC, Glaxosmithkline, etc ... and selling into the EU market? Since the referendum the EU have struck trade deals with Canada, Japan and just recently a group of major South American countries ... I wonder how long it will take the UK to strike deals with these countries and will the deal be better than the much larger EU? I suspect it will take a very long time and we'll be taken advantage of.

Much talk on bulletin boards suggesting that McColl should be removed ... but little mention about what anyone would do differently. The UK advertising market for TV is in the doldrums, has been since the referendum and has worsened as the politicians have failed to get a deal on the UK's exit from the EU, increasing uncertainty for business and stifling investment. The narrative appears to be that with Netflix, Amazon, Facebook etc the advertising revenue is gone forever and will never return. ITV studios continues to grow into a market that is hungry for product. Should we get through this Brexit mess I suspect that ad revenues will return, albeit in a more competitive environment. I personally think the gloom is overdone and ITV (and McCall) might surprise us on the upside once this Brexit period has passed.

I don't think that Malone is sitting on a loss, bear in mind that the shares are hedged by the so-called "ITV Collar", a device that is designed to protect the downside, albeit with limited upside. The "ITV Loan" was used to purchase the shares, and the "ITV Collar" ensures that the shares are protected from a slide on the SP. If the shares are collateral for the loan their value is hedged.