Well, first of all, it's important to note that I have an open position in this dividend-paying stock because I want to hold it for the long term.
However, we should not ignore the fact that we will start wave C of a possible ABC correction soon. We can also see a bear flag shape. Both have a price target of ~$14 to $15.
Regarding the fundamentals, some important things:
Traditional tobacco companies have to face the fact that their products are becoming more and more expensive, thus many people buy cheaper products.
Vapor and liquid alternatives are increasingly popular among the younger generation. Because they are fragrant, tasty and cheaper.
Although these companies have made a lot of profit in the past decades, they are now facing another challenge. If they want to stay competitive, they have to develop to catch up with their competitors who produce products based on new technologies.
Altria Group is constantly working to achieve this. However, the transformation of the production technology and the necessary permits (e.g. FDA) are essential for its success. It's all money and time.
All in all, I think that stocks of traditional tobacco companies are still a good long-term investment. However, it should be taken into account that they may underperform in the coming months. And they can hit new lows. That's why I didn't use all my resources that I intended for this stock. Because if we actually reach the ~$15 zone, then I want to significantly increase my position size there.
Please tell me what you think about it. And share your thoughts.
Do not forget. This does not constitute investment advice. Do your own research before entering a position.
well the yield just make this impossible as many income seekers will flood this stock if the price collapse further , the current yield of 10 % is enough to warrant a bottom especially the company is a dividend lord for decades and nothing is telling this won't continue and the opposite is true so your price of 14 would suggest the yield would be 3,76/14 = 26%
which is totally insane to envisage especially the cashflow history and profitability and the balance sheet
RESPECTFULLY
XOX_XOX
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@PhilippeDelpCFA I know what you mean. But the truth is that the amount of the dividend, and in general that the dividend can last forever, is not set in stone.
The truth is that the world is changing. And there is no guarantee that a company that has been paying dividends for decades will continue to pay dividends. In addition, dividend cuts are also possible. So it practically pays dividends, just not that much.
We have seen and will see examples of this recently.
Thanks for your thoughts. I'm not angry. I'm glad if someone gives their opinion. Especially if he is more competent than me. Because then I can learn new things.
PhilippeDelpCFA
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@XOX_XOX, well this is true but like everything in investment you need to see evidence of this in the income statement or balance sheet or cash flow statement and I can tell you there is no such thing at all for Mo
if the scenario of cutting dividend as true then you would be warned by a trend in the cash flow that would suggest a possible cut
what puzzle me is your extreme unrealistic view the stock will go down to 14 without any supporting fact of why that may be
the stock has decades dividend paying and growth in dividend pay and they recently increase again the dividend
take care always
XOX_XOX
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@PhilippeDelpCFA Unfortunately, sometimes the stock market throws traders and investors off balance with unrealistic events.
As I described in my idea, I consider MO a good investment. I have shares too. But I'm careful.
Because the possible shapes we see are for the purpose of what I described. I also gave my opinion on the fundamentals.
We don't yet see the effect that they will be forced to invest a lot of money in order to stay "trendy". They have to come up with products that compete with electrical products.
It's all a huge investment and expense. A lot of research and development. Which will also affect their balance sheet. But this is all speculative. And I think it is an exaggeration to say that it is an unrealistic idea.
But I still welcome opinions. Even if we don't agree. There is nothing more wonderful than when opinions collide and a healthy debate develops from which everyone can learn.
PhilippeDelpCFA
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@XOX_XOX, yep always do your homework and it is your money at your own risk but remember investing is making money and not losing
David-vega
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I have 3 scenarios and all of them are bearish with target from 11-30$. The abc correction with extension 1on1 to 14$ is one of my scenarios. Keep on posting updates ! Thanks.
which is totally insane to envisage especially the cashflow history and profitability and the balance sheet
RESPECTFULLY