SBMRY

What Are the Qualities of Highly-Rated Stocks on the Valuentum Buying Index?

by

If you were a CEO, what are the 7 most important metrics to focus on to get a rating of 10 on the Valuentum Buying Index? This is a great question because it hits at the absolute heart of the most important concept of investing. Investing may be about buying a great company with a solid and growing dividend, but it most certainly is about buying a great company at a discount to intrinsic value. The difference between what someone can pay for something and what something is worth is the most important concept of investing: price versus value. The price-versus-value component is an integral part of the Valuentum Buying Index. In fact, it is the first component. After all, … Read more

Altria and “Socially Confused” Investing

by

You may have heard of socially-responsible investing. This investment framework tends to avoid businesses that are involved in tobacco, alcohol, sugary sodas, gambling, fossil fuel production, or even defense. There’s nothing wrong with having views about these topics – in fact, that’s what being an individual is all about. However, things get kind of silly when such views dictate how one makes money in the secondary market, or how asset managers invest in portfolios. You see – when you buy or sell stock, the company that you are investing in doesn’t get that money. You are merely trading with someone else. The company only receives your money when you invest in the primary market (IPO) or through new shares, a … Read more

Email Transaction Alerts

by

We know many of you use our services for a wide variety of different reasons, whether for a primary source of fair value estimates and fair value ranges, to assess the risk of the sustainability of the dividend through our Dividend Cushion ratio, or to apply the Valuentum Buying Index as an overlay to your own processes and beyond. For those that are following changes to our newsletter portfolios, we’re going to make a few today. None of these should be surprising. First, we’re taking some profits in Altria (MO), removing half of our position in both newsletter portfolios. Specifically, we’ll be removing 158 shares in the Best Ideas Newsletter portfolio and 101 shares in the Dividend Growth Newsletter portfolio … Read more

Altria Receives Augmented Stake in AB-Inbev-SABMiller Combination

by

On October 13, SABMiller (SBMRY) and AB-InBev (BUD) announced that they have agreed in principle on the key terms of a possible recommended offer to be made by AB-InBev. The deal consists of an all cash offer of £44 (~$67.90) per share for ~59% of all SABMiller shares, not owned by the company’s two largest shareholders, Altria (MO) and the Columbian Santo Domingo family via BevCo. This represents approximately a 50% premium to SABMiller’s closing price on September 14, the last day before speculation of a takeover reemerged. All calculations have been made using October 12 closing prices. The remaining 41% of SABMiller shares, approximately 27% of which is owned by Altria with the balance being owned by the Columbian … Read more

Altria Benefits from Major Beer Deal Talks

by

Altria (MO) may be finally cashing in on its “hidden” assets that we have been highlighting for some time. The company owns a 27% stake in SABMiller (SBMRY), and its shares are receiving a nice bump as a result of increased merger talks surrounding the brewer after speculation began early September 15. Rumors have been swirling for some time around beer giants AB-InBev (BUD) and SABMiller, but this time the news is coming from the two companies themselves. The acquisition, which has been intimated to be in the works, would be the largest in the industry’s history and would create a company that produces approximately one third of the world’s beer. No proposal has been received, but AB-InBev reportedly plans … Read more

Altria Outperforms; Smoking Marlboros Back on the Rise?

by

We’ve pounded the table time and time again on Altria (MO), even including it in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio. The company has been one of our favorite corporate dividend payers, and its large equity stake in SABMiller (SBMRY) offers it financial flexibility like few others. We thought shares have been undervalued for some time, but in the mid-$50s each at present, we’re looking to trim our position. We may use the release of the August edition of the Dividend Growth Newsletter to do so. Altria has a ~4% dividend yield and boasts a 1.2 Dividend Cushion ratio. Fundamentally speaking, things could not be better for Altria. Second-quarter net revenue advanced nearly 6%, to … Read more

Knowing When to Consider Selling Altria

by

Image Source: Jonny Williams There are three things you have to know about Altria (MO). First, the company has tremendous pricing strength, which works wonders on driving increased profitability and free cash flow across its core business lines. Second, the company has a lucrative ~27% economic stake in SABMiller (SBMRY), which offers the firm financial flexibility like no other tobacco stock. And third, the entity pays a dividend that makes some REITs and MLPs envious. Altria is one of our favorite corporate dividend growth stocks, and this won’t change anytime soon. The tobacco giant said April 23 that first-quarter adjusted diluted earnings per share leapt more than 10%, to $0.63. Affirming its 2015 full-year adjusted diluted earnings per share guidance … Read more

Wealth or Income? You Decide.

by

I know better than to jump up and down in sheer bliss with the S&P 500 (SPY) basing at 2,000. Frankly, the chart looks toppy and “tired,” and with the ongoing series of lower tops, I wouldn’t be surprised that we break down in the coming weeks. Earnings disappointments have been rampant, and following one of the strongest periods of economic expansion in some time during the third quarter (+5%), the pace of US GDP growth in the fourth quarter barely edged out half of the preceding period’s rate of expansion (+2.6%). But that’s yesterday’s news (well, last year’s really), and what concerns me most is that first-quarter GDP will be quite disappointing, even with the stimulus brought about by … Read more

The Correction: No Panic Selling on Columbus Day

by

The past three years have been an anomaly, in our view, with the broader equity markets practically going straight up. For those new to the markets and stock investing, in general, this simply is not how the equity markets behave. Many stock pickers have even become frustrated as a result of the market’s steady-eddy advance with negligible meaningful swings during most of the past 36 months. The market, as measured by the SPDR S&P 500 (SPY), hasn’t had a 10% drop in nearly 1,100 days. As of last Friday’s close, we’re a mere 5.6% from the intra-day high on September 19. During the past three years, the market has made everyone look like a genius, and frankly it has been … Read more

Best Ideas Newsletter Excerpt: A+ for Altria and Apple

by

By Brian Nelson, CFA Just as I’m writing the intro to this edition of the September edition of the Best Ideas portfolio, the good news keeps coming. If you’ve read anything about our top holdings, you’d be hard-pressed to miss a discussion on Altria (MO) and our thesis that goes into the tobacco firm’s 27% economic stake in fast-growing global brewer SABMiller (SBMRY) as support for not only its dividend growth but also its valuation. The news wires are buzzing that SABMiller approached Heineken (HEINY) for a tie-up, and that Heineken rejected its offer. However, there are now talks that Anheuser-Busch InBev (BUD) is looking to put together a bid for SABMiller, and shares of the latter are soaring on … Read more