Opinions Ross Healy
Philip Morris InternationalPMDON'T BUYMay 03, 2019
It has a great dividend. The balance sheet has gone no where and the fair market value is 35% below current levels. Very, very expensive. Cigarettes will remain around a long time, but it is not the kind of stock that would let him sleep well at night. It is trading at 82 times book value -- way too risky. Their big share buy back might backfire in that the there may not be enough liquidity to create support in time of trouble.
$85.70
Stock price when the opinion was issued
tobacco
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RISKY
Raised dividend 9%.
Tentacles in cannabis, but it's not showing on the bottom line yet. Headwinds of society and governments pushing against it more and more, and all that works against sales and revenues. You have to know what you're buying and why; people own this for the yield, not for growth.
Danger is that revenues will shrink, FCF won't be as abundant, and dividend may be in jeopardy. Pay particular attention to the payout ratio, quarter to quarter, and see if it's going up.
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DON'T BUY
Hard to analyze, because they don't have any balance sheets (which sounds weird). For example PM, with its 5.5% yield, has negative shareholder equity of 10B. If something were to happen to this company, there's no balance sheet to help you. It's a high wire act. These stocks are too risky for him. Try to avoid.
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DON'T BUY
Average down? Normally this space is a very strong cash flow generator. Personally, she does not invest in stocks that have been proven to be detrimental to people's health. She would sell and put the money into a sector that has better growth opportunities. (Analysts’ price target is $97.00)
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