Altria "kills" all stocks with an average annual return of more than 20%
Altria, the world cigarette giant, may not be well known, but its brand Marlboro is the largest cigarette brand in the world, contributing more than 80% of the company's profits every year. China Fortune Network reporter learned from the US Centers for Disease Control and Prevention that Marlboro's American cigarette market share was as high as 465,438+0% in 2065,438+06, which was higher than the sum of the market shares of the next eight brands. Marlboro has occupied a monopoly position for more than 40 years.
Marlboro is so domineering, so how big is this "America's largest bull stock"? Jeremy Siegel, a world-class expert in investment and finance and a professor at Wharton Business School, tried to find the best-performing stocks after the Standard & Poor's 500 Index 1957 in his book The Future of Investors. What they found was neither an exciting technology stock nor an oil giant, but a simple consumer stock: cigarette manufacturer Philip Morris Company (now called Altria). In Jeremy Siegel's view, no company can match Altria. He also found that among the 20 stocks with the best long-term performance, 1 1 only came from a dull and boring sector: necessities and consumer goods.
CNN calculated an account-if 1968 invested 1 USD in Altria, as of February 20 15, the investment value of this 1 USD stock was as high as 6638 USD (including dividends). This means that the average annual return of this stock in the past 47 years is as high as 20.6%. If you had invested $65,438+0 in the S&P 500, it is only worth $87 now.
Patrick O'Shaughnessy, an American fund manager, expanded the scope of measurement on the basis of Jeremy Siegel's research-all stocks in the American stock market. The results show that from 65438 to 0963, Altria is still the best-performing stock, with an average annual increase of 20.23% and a cumulative return of over 1 million times. Although inflation and other factors are not considered, few stocks can surpass Altria only in terms of nominal return.
Super-profiteering "bad stocks" suffered a negative policy and suffered heavy stock price losses.
As the "most profitable" stock in the US stock market, Altria has an ultra-high net profit margin and is also one of the most profitable companies in the US stock market. Altria's current market value exceeds 6543.8 USD+020 billion. The annual report of 2065.438+06 shows that the company's total revenue is $25.744 billion, its net profit is $65.438+0.4239 billion, and its net profit rate is as high as 55.3%. In 20 15, its total revenue was $25.434 billion, its net profit was $5.245438 billion and its net interest rate reached 20.6%. What does this mean? Let's look at the profitability of well-known American companies.
As shown in the figure, compared with the shares of the same consumer giant, Altria's net profit margin of 55.3% in fiscal year 20 16 is absolutely superior, and even its net profit margin of 20.6% in fiscal year 20 15 is much higher than that of Nike, Coca-Cola, Pepsi-Cola, Procter & Gamble and other companies. Compared with well-known technology giants, these technology monopolies are all famous for their high profit margins. In fiscal year 20 16, the net profit margins of Apple, Google and Microsoft were close, which were 2 1. 19%, 2 1.58% and 23.57% respectively. Facebook and Altria have the same appearance.
In fact, in the past few decades, the tobacco industry has been one of the worst performing industries in the United States, and tobacco advertising has been banned for more than ten years. In addition to being in a monopoly position, tobacco companies have other reasons to maintain excessive profits by using factors such as consumers' addiction to price increases.
"Altria is a typical' original sin stock'. There are a lot of' bad stocks' in American stocks, and their performance and share prices are very good. For example, the return on private prison stocks has doubled in the past year; Some stocks in the cannabis industry also rose sharply. This kind of' bad stock' is very profitable, such as tobacco, marijuana, prisons and nightclubs, which are all high-profit industries. " Chen Kaifeng, chief strategist of Hai Yin Capital and professor of new york University in the United States, told Fortune.com of China that "many institutional investors in the United States cannot invest in these stocks because of legal restrictions, such as state pension funds and university endowment funds, because investors are restricted, which leads to a stock price premium, and investing in ordinary investors has additional benefits."
However, this "stock king" has recently encountered negative regulatory policies. On July 28th, the US Food and Drug Administration announced a tobacco and nicotine supervision plan to reduce nicotine in cigarettes to a non-addictive level by setting achievable product standards. This is only the first step of FDA's comprehensive review of industry regulations, with the aim of encouraging the development of new products that are less dangerous than cigarettes.
After the news was released, the share price of American tobacco companies fell collectively. Altria experienced the deepest decline of nearly 20% to $60.065438 +0, and fell 9.49% to close at $66.94 after hours. British American Tobacco, which owns brands such as Haocai, also fell by more than 10%. In the following days, Altria's share price, which suffered heavy losses, has been hovering at a low level and has not yet come out of the negative shadow.
Will Maotai be the next Altria? Don't pay too much attention to warnings in the industry.
The weakness of Altria has made many domestic Maotai fans daydream. Many Moutai fans in China have always regarded Aochi Adam as the benchmark of Maotai. As one of the most profitable A-share listed companies, Kweichow Moutai earned 38.862 billion yuan in 20 16, with a net profit of167/KLOC-0.8 billion yuan and a net profit margin of 43%. The degree of "profiteering" is comparable to that of Altria.
In the eyes of Maofen, the nature of the two is also very similar: both produce products that are harmful to health, but both are the kings of profiteering with ultra-high net profit, and both are the ultimate value targets that have not been recognized by value investors. Others believe that Altria's unparalleled rising speed stems from the unbreakable addiction of tobacco companies to the natural moat. Although the smoking rate in the United States has been declining, its net profit has been growing at a high speed because of its high monopoly. For companies with such potential, only Maotai is the A-share company. Even some hairy netizens calculated that the listing price of Kweichow Moutai in August 20001year was 3 1.39 yuan. If the rights issue is recalculated in the future, the re-allotment price on August 7 will be 29 10.65 yuan, an increase of 9 1.73 times. Compared with the market performance of Altria, Maotai has a huge imagination.
However, the investment in tobacco industry is different from liquor, and the two cannot be simply benchmarked. "Moutai has changed from the original consumer goods to collectibles. Many people collect Maotai, which leads to the price increase and insufficient output of Maotai. Liquor is harmless to the body and is a consumer product; But cigarettes are harmful to the body, and there are tips on the cigarette case. " Although capital is profit-seeking, whether it is harmful to human body is not the key factor of investment, but investment still depends on the long-term development and profit growth of the company.
"Altria is a special stock and cannot be directly compared with Maotai." From the historical evolution of Altria, "One of Altria's main businesses is cigarettes, which can lead to addiction and lung cancer, so it has been sued by various States in history for this reason and compensated hundreds of billions of dollars. The prosecution eventually led to the split of the four companies, making Altria mainly engaged in tobacco business. Therefore, the so-called historical performance of the company is indeed very high, but its calculation is partly attributed to other stocks such as food companies that have been spun off, and it is impossible to simply set the historical performance to the present. Now Altria is only part of the traditional company business. "
It is understood that Marlboro manufacturer Philip Morris changed its name to Altria Group in 2003, which deals in tobacco, food, beer, financial services and other fields, involving well-known brands such as Kraft, Cadbury, Oreo and Miller Beer. Since then, the company has gradually split its international business and food business.
In addition to benchmarking Maotai, Altria's share price also plummeted due to the market panic caused by FDA documents. Many investors believe that this wave of selling is a market misjudgment. Now is a rare buying opportunity for this "stock king", so you can "buy a ticket and get on the bus" as soon as possible.
Altria still has certain legal risks. "It is very likely that when a class action lawsuit happens again in the future, the company will continue to have large-scale lawsuits and pay large-scale compensation. Investors are not advised to be the benchmark of Maotai, and the two are completely different. "
It is worth noting that although domestic investors have exclaimed that the opportunity has come, foreign institutions still set Altria's latest evaluation as "selling". This week, BidaskClub upgraded the rating of Altria Group from "strong sell" to "sell", and RBC of Royal Bank of Canada also warned investors not to buy the investment target. Although Royal Bank of Canada (RBC) analyst Nik Modi upgraded Altria's rating from "below the industry" to "in line with the industry", he still set the target price of the stock at $62, still 7.4% lower than the closing price of $66.94 after last Friday's plunge. Modi believes that although the stock price shock caused by regulation has created many buying opportunities in the past two decades, this time it is different.