CRON

Constellation Sets Optimistic Tone, Outlines Cannabis Opportunity

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Image Source: Constellation Brands The producer of beer, wine and spirits reported excellent second quarter fiscal 2019 results and described cannabis as a “once-a-century disruptive market transition.” Without a doubt, the opportunity in cannabis looks tremendous, but the landscape is fast-evolving. We think Constellation will be a long-term winner in the space, but outsize profits in cannabis may be tough to come by initially. By Brian Nelson, CFA Constellation Brands (STZ) reported solid second quarter fiscal 2019 results October 4 that showed a very healthy and growing business. Net sales advanced 10%, while operating income increased 9% on a comparable basis. The company raised its fiscal 2019 earnings per share outlook to $14.10-$14.25 on a reported basis (was $11.47 in … Read more

In the News: Pot, Pop, and Pricing Wars

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By Kris Rosemann The Growing Pot Market As the number of states legalizing recreational marijuana continues to grow, investor interest in the space continues to rise and the public stigma around the substance continues to fall. According to a recent RBC note, roughly 83% of Americans believe marijuana should be legal in some capacity, suggesting further decriminalization and/or outright legalization is likely to take place in coming years, a notion supported by Canada’s recent nationwide legalization. RBC also estimates that legal marijuana sales in the US will grow at a 17% compound annual growth rate over the next decade to approximately $47 billion in legal annual sales. Current recreational sales of marijuana in the US, both legal and illegal, are … 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