Early Retirement Extreme Forums

BTI has a solid 8+% dividend. From the Value Line Report, it's debt is less than its equity. Stable cash flow. International sales.

A menthol ban scare is current but it seems oversold. The recent buyout of RAI seems to also have an influence on the share price. It had a recall of a vaping product, I believe, but this seems a small percent of their overall sales.

Some thing I have noticed is that no insiders seem to be buying it unless through DRIP or "EX" means buying.* Yahoo finance has a long thread which details some potential problems with debt being taken on to buy RAI but the debt:equity seems reasonable from the Value Line report. Interest coverage stands at 6.2x, so it's reasonable.

I know I'm missing something but what is it? This has been my biggest loser and I'm curious to buy more but I want to find out what's there that I'm not seeing.


*https://www.stockopedia.com/share-price ... -dealings/

If you look at the company profits around 15 percent is from the US market. While they do make a lot of money from the menthol cigarettes in the US market (I think around 30-40 percent of cigarettes sold in US), even if the menthol ban were to happen it would not destroy the profitability. Most methol smokers would switch to regular cigarettes instead of quitting entirely. The other issue with the company is the Brexit situation which has investors negative on British companies in general. Personally, I bought around the current price as I see these issues as temporary and the company is still a cash cow and I don't worry over the sustainability of it's dividend.

BTI is a HHT *! Better avoid these kind of stocks.

HHT? Can you explain what that means

Health Hazard Trap.

It may not be company specific. The entire sector is down 18.20% for the year and has far under performed the S&P. Neither Credit Suisse nor CFRA have reports up for it though and I don't feel like going through the annual reports for a post.