Bireme Capital's Evan Tindell on British American Tobacco $BTI and tobacco's inflection point

Evan Tindell, CIO of Bireme Capital, joins the podcast for his fourth time to discuss his thesis on British American Tobacco p.l.c. (NYSE: BTI), the company engages in the provision of tobacco and nicotine products to consumers worldwide.
For more information about Bireme Capital, please visit: www.biremecapital.com/
Evan's $BTI write-up in Bireme Capital's investor letter: www.biremecapital.com/blog/de...
Chapters:
[0:00] Introduction + Episode sponsor: Fundamental Edge
[2:04] Overview of British American Tobacco Company and why they are interesting to Evan
[6:42] What Evan thinks his edge is with $BTI / comments on stock performance over the last few months
[11:58] Vaping, regulations and how this affects $BTI
[18:38] $BTI annual report
[25:24] Competition from non-regulated folks / legal liabilities for new $BTI products / menthol cigarette ban
[34:00] Doom-looping on cigarette industry
[38:00] $BTI's ownership stake in ITC (formerly known as India Tobacco Company)
[43:43] "Sum of the Parts" stocks
[51:07] $BTI capital allocation strategy
Today's episode is sponsored by: Fundamental Edge
You’ve probably heard it’s an “apprenticeship” system, or that you’ll “learn by osmosis”? But what if there was a better way to learn the equity analyst job? Fundamental Edge is re-defining training on the buy-side. Use the code "10YAVP" for a 10% discount. Website: www.fundamentedge.com/
Whether you’re already in the seat or looking to break in, the Analyst Academy from Fundamental Edge offers a thorough and flexible path to developing the tools and frameworks employed by leading hedge funds. Breaking in: www.fundamentedge.com/breakin...
Check out the Academy syllabus and sign up for future free content: fundamental-edge.ck.page/acad...

[@uberkikz11]

Good discussion, one of the best risk/rewards in large cap developed markets. Has been my largest position for more than a year, weighted north of 16% & looking to ramp to ~20-25%. Yes there are downside risks, but comparing the true FCF generation of the business, even with a wider range of outcomes than say MO & PM, I struggle to see how you return an 5-10 year IRR

[@johngalt6378]

Thanks. Any more resources to learn more about Bats?

[@phantomcreamer]

ESG provides mispricing in the market. In the long term, stocks are still a weighing maching. The question is whether BTI is marked below value or not.

[@bernteinar906]

Own 7515 shares. cant wait until divs on 02 of May so i can reinvest it all :)

[@b.r.8528]

can I ask what your average price is?

[@tros221]

Concerning the ban of off-brand vaping products: BAT works together with regulators and has to balance a fine line in order to keep market shares while doing so - this is why progress is somewhat slow. The current approach is to select individual brands and revoke there license for being a consumer product/ prevent them from obtaining a license in the first place. The danger to BAT is that the most effective way would probably be a ban of the technology, which would put BAT PM etc out of business too ... that's why they lobby for vape remaining a smoking alternative (thus medically relevant to the countries interests) while having individual "cotton candy kids bars" labeled as individual infringements rather than a whole market problem. You are both probably right though, momentum will build, though it has to also be supported by the BAT product to actually compete with the off brand stuff, which as of today it doesn't always do (specifically in terms of pricing and quality, both probably improving with scale).

[@SeniorSnomad]

Regarding the tax implications for the sale of ITC, couldn't BAT use their recent write-down of their tangible book value as an offset to their capital gains on the sale of ITC?

[@luigi851]

Highly undervalued. IMO It is ridiculous that the politician fighting agains smoking so much! Alcohol is much worse for your liver and health.... Current Dividend shield is now 10% I keep buying more.