Signals like this make CM smile. In what is already a crowded trade, on what basis is it worth shoving more struggling retirement dollars into over valued virtue signaling companies with dim prospects in the coming cycle? Better off rolling tobacco in $5 bills and setting it alight.
As CM wrote last week, tobacco companies (amongst the least ethical) have chronically underperformed and in a market fighting with macro contagion risk, high-yielding stocks that are despised make a lot of sense when money comes looking for mean reversion.
British American Tobacco (BTI) is trading at $36.29 almost half the level of two years ago. Now at 1.02x book value and a 7.3% yield.
Philip Morris Int’l (PM) is at $71.20, down from $122.90 in 2017. A 6.4% dividend yield.
Imperial Brands (IMBBY) at $26.58 down from $55.55 in 2016. A 9.2% yield.
JT is less than half its 2016 number trading at $21.36. A 6.45% yield.
Philip Morris doesn’t have a vaping business but it appears with all these bans in NY etc that nicotine-addicted vapers will switch back to the old school.
No one will ever invite you to a decent dinner party again if you mention that you have a super fund that is up to the gunnels in woke corporations.