Rothmans Inc (ROC.TO) Buy, Sell or Hold

Rothmans Inc (ROC.TO)

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1 watching

DON'T BUY

Pays a high dividend because people recognise it as a declining industry. Good cash flow. Wouldn't buy it because of their product.

DON'T BUY

Sin stocks tend to outperform over time. Had a very good history because it was a pure play in tobacco. Has paid out huge dividends. It looks like their market share has peaked and is coming down so the stock hasn't been as good an investment lately.

BUY

The dividend is secure. A well-run company. Great management. A great free cash flow business.

DON'T BUY

A lot of the return and anticipation of special dividends is what has driven the stock. Have paid out most of the cash. A good place to hide, but the upside is a lot less than it used to be. To check, look at how much cash is building up every quarter. If it is building up, that is the time to buy.

DON'T BUY

If you strip away the ethical issue, there is the substitution affect of private brands are eating away of their brand names as well as counterfeiting from the US. This is impacting their profit margins.

DON'T BUY

Smoking is an industry that will increasingly rely upon marketing to customers in the 3rd world. He would not invest in this on moral grounds as well as its long-term prospects.

BUY

6% dividend. At these levels, it is a very attractive stock. Stable cash flow. Possibility of a special dividend.

WEAK BUY

Facing litigation in Ontario and Quebec. Prefers the bonds instead.

BUY

Nice yield. Has a history of paying out special dividends. Good price.

DON'T BUY

Tremendous free cash flow business. There is a litigation risk and also, their focus is on private labels which is a lower margin business because of competition. As people get used to the cheaper generic cigarettes, they will have to cannibalise their high premium cigarettes.

BUY

Stock hasn't been doing very well considering the long-term track record of the company. There is always the concern about lawsuits in the cigarette industry. Anytime you get a company that is more or less the dominant player in the country and has an addictive product that generate cash flow, it's never usually a bad investment. If you're looking for dividends, a great investment.

DON'T BUY

Rothmans has the huge lawsuit hanging over its stock. It is slowing the stock down. It is not a good place to be right now.

DON'T BUY

Is not involved with the tobacco companies due to moral reasons. Rothmans are still involved in litigations. Stock is not acting well. Avoid

SELL

It has good free cash flow numbers. The dividend yield is good. However, the margins are slipping . It has been trading sideways for the last year. Not likely to go up. If you own, sell.

SELL

There are lawsuits against this company. He is not recommending to buy. If you have it sell it around $22.

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Rothmans Inc (ROC.TO)