Many tobacco companies have fell from grace in recent years and in my opinion they reached a point where they were fundamentally quite cheap. This led me to add in $IMB.L (Imperial Brands PLC) and $BATS.L (British American Tobacco) to the portfolio.
Lets look at Imperial Brands - It has had a really steady income for the last 5 years. Every year it has turned over around £32billion. Operating profit has ranged from £2.2billion up to £3.1billion in the last accounts.
The market cap of this company was only around 8 times profit when I first invested. Pardon the pun but in the words of Warren Buffet these companies could very well be good cigar butts. Although they are in industries which may be dying out there is still life left in them for a few good puffs yet.
I took sizeable positions in these companies on after doing some technical analysis. Around 8.4% and 4.5% of the total fund value. These have been very good trades for us as we are currently up 21% and 25% on these positions as well as collecting some nice hefty dividends. ... Show More
