APHA

Altria May Never Make A Comeback

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Image Source: Altria By Brian Nelson, CFA About 15 years ago, I picked up a text from Professor Jeremy Siegel out of the University of Pennsylvania’s Wharton School of Business, The Future for Investors (1). I must have been at one of his talks. I ended up getting a signed copy from him; it was a neat experience. In any case, perhaps one of the more striking takeaways from his 2005 book was the following excerpt: Some readers may be surprised that (Altria) is a top performer for investors in the face of the onslaught of government restrictions and legal actions that have cost the firm tens of billions of dollars and threaten the cigarette manufacturer with bankruptcy. But in … Read more

Earnings Roundup for Week Ended May 17

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Image Shown: We cover several earnings reports in this article across several sectors and industries to provide an overview of how corporates performed during the early stages of the ongoing coronavirus (‘COVID-19’) pandemic. 

Reducing expenses, generating efficiency gains, and ultimately improving the cost structure of corporates appears to be a key theme during the first-quarter 2020 earnings cycle. Management teams across the board are hunkering down and preparing for the pain to continue as global economic activity is expected to grind to a halt in the second quarter of 2020, before recovering somewhat due in part to massive fiscal and monetary stimulus measures that were launched to offset the negative impact COVID-19 is having on economic activity.

High Yield Dividend Newsletter Portfolio Holdings AT&T and Philip Morris International Continue to Shine

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Image Shown: AT&T continues to surge higher this year as shares of T converge towards their intrinsic value, a process supported by recent activist investor activity directed towards the company. If you may wish to add the High Yield Dividend Newsletter to your membership, please click here. By Callum Turcan and Brian Nelson, CFA AT&T On October 28, AT&T Inc (T) reported third-quarter 2019 earnings, and the market clearly liked what the company had to say. Shares of AT&T are trading up ~4% as of this writing as the company’s stock price continues converging towards its intrinsic value, in our view. Our fair value estimate for AT&T stands at $40 per share, with room for upside, and we continue to … Read more

Philip Morris International: Free Cash Flow King With Upside Potential

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Image Shown: Philip Morris International’s Marlboro cigarette brand remains very popular worldwide. Pricing power is essential to offsetting declines in traditional cigarette sales volumes as the company positions itself for alternative tobacco products to become a larger part of its revenue streams. Image Source: Philip Morris International – Third quarter 2019 earnings presentation By Callum Turcan Philip Morris International (PM) posted third quarter 2019 earnings on October 17. As of this writing, Philip Morris International yields 5.8%, and we include shares of PM in our simulated High Yield Dividend Newsletter portfolio. While the company cut its full-year forecast for 2019 partially due to a tax charge, the deconsolidation of a subsidiary, and foreign currency headwinds, Philip Morris International is still … Read more

Philip Morris International Moving on Upwards

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Image Shown: We increased the weighting in shares of Philip Morris International in the High Yield Newsletter portfolio back on November 18, 2019. Shares of PM have rallied aggressively off of their Fall 2019 lows through the middle of February 2020. By Callum Turcan One of our favorite high yield ideas out there is Philip Morris International Inc (PM), and please note we increased the weighting of shares of PM in our High Yield Dividend Newsletter portfolio (check out our HYDN here) back on November 18, 2019 (link here covering those portfolio changes), and our timing couldn’t have been better considering shares of PM have aggressively rallied since September 2019 through the middle of February 2020. There’s still room for … Read more

Philip Morris International is Ready to Ride Out the Storm

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Image Source: Philip Morris International Inc – First Quarter of 2020 Earnings IR Presentation By Callum Turcan On April 21, High Yield Dividend Newsletter portfolio holding Philip Morris International Inc (PM) reported first-quarter earnings for 2020 which beat both top- and bottom-line consensus estimates. Shares of PM currently yield ~6.1% as of this writing, and we view that payout as well-covered given the resilience of Philip Morris International’s free cash flows and business model (demand for tobacco and tobacco products is inelastic), along with the firm’s ability to tap its revolving credit lines and potentially debt markets if needed. Management pulled the firm’s full-year guidance for 2020 and instead offered guidance for the second quarter, given the lack of clarity … Read more

Philip Morris International Posts Solid Guidance, Cuts Costs

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Image Shown: Excluding foreign currency headwinds, Philip Morris International Inc’s financials held up relatively well during the first half of 2020, all things considered with an eye towards the pandemic. Image Source: Philip Morris International Inc – Second Quarter of 2020 IR Earnings Presentation By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic has severely stressed consumer spending in countries all over the globe, and that includes spending on cigarettes and other tobacco products. For a major tobacco company like Philip Morris International Inc (PM), this dynamic weighs negatively on its near-term outlook, though the company is well-positioned to ride out the storm for several reasons. We continue to like Philip Morris International as a holding in the High Yield Dividend … Read more