Earnings prospect for BAT for next few qtrs. look very bad...every qtr diminishing profit and outlook is not improving. They will keep cutting dividend
If you compare BAT with the likes of NESTLE, CARLSBERG HEIM, F&N, DUTCHLADY, among others, on these high priced shares, you will notice that their dividends are worst off. So, what's wrong with BAT at price. If you have no faith in this stick, please leave this space. This is for BAT followers, preferably to share their thoughts and contribute positive news on BAT, cheers.
When you buy BATMAN at this beaten down price, you're holding practically at record low prices. With decent profit margin on its business and a very good dividend policy, you can't find a better buy among the other expensive peers in the market. The worst is about out with the exception of Q2 which may be slightly worst that Q1, then its recovery thereafter. Market is forward looking and you're buying for a recovery in earnings and the worst is probably behind BAT now. The paramount pre-requisite in buying or choosing a stock should always be 1st, credible management, 2nd, business potential, 3rd, recurring FCF, 4th, good dividend policy and yield, historical low price, and so on.
So, don't complain and have patience when you're buying at once in a lifetime price for long term investment, cheers.
kelvin61, you are wrong...the main criteria is outlook of the industry must be good. There is no point buying into company with credible management if the outlook for the company is poor...as the fundamental of the company is govern by earnings prospects. Right now, the outlook for he industry and company is pretty bleak
@ Investing_bursa. Take a good hard look at other expensive shares in Bursa and tell me which other stock offers a good entry at current price. I can't find many except maybe Allianz. Most businesses also have their ups and downs. The importance is finding a stock with a recession proof business like BAT. They are innovative and spend continuously in R&D to grow the business eg e-cig and is also undergoing rationalisation to reduce OPEX by 20% to improve their margin. If BAT is not faced with some headwinds, do you think you can buy at this cheap price? So, either you see potential in the recovery of BAT's business after 5 years of decline or you can choose not to buy this business. No right or wrong answer. For example, there are alot of people believing that Glove stocks are still cheap as they are going up daily without any let up. If you think they are cheap, you can always try your luck but hopefully you don't get caught at prices that will take you a lifetime to get back. The current PER of all glove stocks are crazy. But for those wanting quick profits, then the risk is worth taking. So, choose wisely your hard earned money for quick gains or the risk of quick losses too, cheers.
No matter how good the management is, how much they spend on R&D and how much div they pay, the key point is the gradual increment of illicit cigs which will slowly eating up BAT profit. The worry here is not how good they r but how powerful the syndicate are operating. Salute the best ever government
Kelvin61, you must understand a lot of businesses are cyclical in nature . Most of the strong business can recover from downturns if there is no structural change to their business. Their earnings will be temporarily hit but will recover in time. BAT is suffering from not a cyclical downturn but a structural one . You can see their earnings have been steadily dropping over time even before the outbreak of Covid19 due to illicit cigs. Unless this is addressed, BAT earnings will never come close to where it was before and one should not be disillusioned thinking it will one day.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Keyman188
5,968 posts
Posted by Keyman188 > 2020-05-27 12:28 | Report Abuse
Okok...since so many voice wanted to lower target price...
Then Keyman188 follow the suit...
Adjust target price...
1st trench : 8.50
2nd trench : 8.00
Final trench : 7.00
So every body happy boombeebee...........