Thursday, January 29, 2009
More SKF
Bought some SKF yesterday at $125.73 yesterday while it traded down ~ 18% as BAC, WFC, MS, and C rallied 15-20% on BAD bank speculation...Cringed as the SKF continued downward and closed at $120, now at ~$130 and positive territory I will see how long it can go before I close out by todays bell...
Thursday, January 8, 2009
Due Diligence: Altria (MO)
Regardless of the future direction of the S&P 500 average, Altria (MO): the United States's largest producer and distributor of tobacco products, should maintain its historical performance of duly rewarding shareholders.
The Fundamentals:
Price: $15.15
P/E: 4.92
Dividend & Yield: 1.28 (8.40%)
5 Year
A look at the basic 5 year chart illustrates the stability and commitment to long term growth of the company. Note the April 2007 spinoff of Kraft Foods & PMI International.
The attraction to own Altria lies in its 8.4% dividend yield, with near term U.S Treasuries yielding just over zero and 10 year notes barely above the 2% level, a dividend of this magnitude is very attractive compared to the overall broader market. Savers, like myself are being punished by the action's of the Federal Reserve who have pushed the Fed Funds overnight lending rates to historical lows. A current money market yield of just over 2.25% is not sustainable to keep up with long term inflation.
This link illustrates Altria's commitment to shareholder value, the company has increased its dividend each of the last 10 years.
dividend.com
Altria, unlike the broader market is not as dependent on the cyclical nature of the business cycle, their product: tobacco, which with its recent acquistion of UST includes smokeless products is not something readily shed in undue economic circumstances.
I also see room for capital gains from this $15 dollar level as the broader indexes continue their decline & muddle through period. Altria has traded lower in the past several months alongside market indexes and the shares have also been under pressure from potential lawsuits involving the brand of "light" cigarretes. However, Altria has faced litigation pressures in the past and are currently well poised to handle their legal issues and appear stronger because of it.
Recent Readings on (MO):
Best Stocks for 2009
Note the recent legislation of the FDA which in essences provides additional barrier to entry into the tobacco marketplace. Altria currently operates 50% of the U.S tobacco industry.
Altria has been great time to exit
I couldn't disagree with more with Todd's assesment of Altria, however there are a few very relevant comments (below the article)that shape the arguement against Todd's view which I find very insightful notably eric k, michael, fly, and Dividends inc
dividendinc.blogspot
A terrific blog I came across while researching MO, and a welcome addition to my influential minds category.
Altria closes buy of UST
The addition of Copenhagen and Skoal products gives Altria ample market share in the smokeless tobacco category.
Not to be overlooked is Philip Morris Capital Corporation (PMCC) Altria's investment company that manages leveraged and direct finance lease portfolios. With an ever increasing stake in South Africa's SAB Miller now at 29% Altria continues to diversify its product line while recieving healthy quarterly dividend payments.
Recommendation: BUY
Price Target $14.50-$15.50
The Fundamentals:
Price: $15.15
P/E: 4.92
Dividend & Yield: 1.28 (8.40%)
5 Year
A look at the basic 5 year chart illustrates the stability and commitment to long term growth of the company. Note the April 2007 spinoff of Kraft Foods & PMI International.
The attraction to own Altria lies in its 8.4% dividend yield, with near term U.S Treasuries yielding just over zero and 10 year notes barely above the 2% level, a dividend of this magnitude is very attractive compared to the overall broader market. Savers, like myself are being punished by the action's of the Federal Reserve who have pushed the Fed Funds overnight lending rates to historical lows. A current money market yield of just over 2.25% is not sustainable to keep up with long term inflation.
This link illustrates Altria's commitment to shareholder value, the company has increased its dividend each of the last 10 years.
dividend.com
Altria, unlike the broader market is not as dependent on the cyclical nature of the business cycle, their product: tobacco, which with its recent acquistion of UST includes smokeless products is not something readily shed in undue economic circumstances.
I also see room for capital gains from this $15 dollar level as the broader indexes continue their decline & muddle through period. Altria has traded lower in the past several months alongside market indexes and the shares have also been under pressure from potential lawsuits involving the brand of "light" cigarretes. However, Altria has faced litigation pressures in the past and are currently well poised to handle their legal issues and appear stronger because of it.
Recent Readings on (MO):
Best Stocks for 2009
Note the recent legislation of the FDA which in essences provides additional barrier to entry into the tobacco marketplace. Altria currently operates 50% of the U.S tobacco industry.
Altria has been great time to exit
I couldn't disagree with more with Todd's assesment of Altria, however there are a few very relevant comments (below the article)that shape the arguement against Todd's view which I find very insightful notably eric k, michael, fly, and Dividends inc
dividendinc.blogspot
A terrific blog I came across while researching MO, and a welcome addition to my influential minds category.
Altria closes buy of UST
The addition of Copenhagen and Skoal products gives Altria ample market share in the smokeless tobacco category.
Not to be overlooked is Philip Morris Capital Corporation (PMCC) Altria's investment company that manages leveraged and direct finance lease portfolios. With an ever increasing stake in South Africa's SAB Miller now at 29% Altria continues to diversify its product line while recieving healthy quarterly dividend payments.
Recommendation: BUY
Price Target $14.50-$15.50
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