The Shares Researcher

Intro Probably most people have used a product of this company, which produces ballpoint pens, lighters and razors. In 2019, BIC sold 31 million products every day and is either number one (for lighters) or number two (for shavers and stationery) in terms of market share. Total revenue was hovering around €2 billion p.a. with a free cash flow generation of approx. €200 million per year – as can be expected from a mature, solid firm with a long history. The founder’s family still holds 45% of the shares (voting rights 61%) which guarantees a long-term vision and strategy. Valuation BIC has withdrawn its guidance for 2020, as many other companies as well, where it was initially guiding for a flat year. Historically, BIC earned around €5 per share and we may expect similar numbers after the current crisis will be over, which would result in a P/E of approx. 10x. Besides the attractive dividend (was set at €3.45 per share in the last years and reduced to €2.45 due to COVID-19), the c...

Intro Cigarettes? Who and why would anybody invest in cigarettes nowadays since everybody is aware of its possible health issues it can cause and hence the declining client base? Well, the tobacco industry has done an excellent job to more than compensate the declining customer base with price increases or substitutes. Altria, probably best known for its Marlboro cigarettes, has a very long history and is seeking to invest its high cash flows from the tobacco portfolio into other related trends such as the stakes in IQOS or JUUL. Besides, the company owns shares in ABInbev, the drink and brewing company, as well as a wine producer and cannabis firm. Valuation Altria’s share price dropped around 50% from almost $80 just three years ago. Does this make the company a bargain? Of course not, but let’s look at the earnings and balance sheet: The company has been generating consistent revenues of around $25 billion in the last years and, what’s more impressive, has been able to raise its ope...