🚬 Hide your BTI, Hide your wife - British American Tobacco(BTI) Bull ThesIs -YOLO & DD 🚬
# Bull ThesIs Introduction - Prepping the bull
A lady, whilst leaving my apartment with me was complaining about her husband smoking. I told her to thank him for keeping the dividend war machine alive. And this, gentlemen is why i am all-in and quite literally bullish on BTI, British American Tobacco. Their CEO became the [highest paid CEO in Britain](https://www.ft.com/content/c97cc464-699e-4e01-a58d-b38ef68099e0) as reported by the FT literally whilst i was writing this Michael Burry tier analysis.
I provided due diligence where he told you to invest in Palantir in [2021](https://www.reddit.com/r/wallstreetbets/s/4OcGV8xelN). You paper handed. I I also provided due diligence on[ Seadrill distressed debt investment](https://www.reddit.com/r/wallstreetbets/comments/mjkexn/comment/gtaqtd6/) ([ i was righ](https://www.prnewswire.com/news-releases/seadrill-new-finance-limited-to-be-renamed-paratus-energy-services-ltd-the-issuer-announces-emergence-from-chapter-11-301465461.html)t). Time for the third:
British American Tobacco lost 10% of book value on Thursday and Friday. This is a company selling addictive products([inelastic goods](https://www.youtube.com/watch?v=COf2bQEQ7Zw)), with the highest profit margin of all US industries, the largest single largest donor to the Trump campaign pre-election and paying 7.62% annual dividend taxed at 0-15%.
The panicked selloff was triggered by 2 things:
* Illicit vape competition (countered by FDA/DOJ taskforce and political donations)
* Set-aside for a Canadian lawsuit(doesn't affect cashflow - also isn't settled).
Neither of these materially affects the firm’s long-term valuation or cash flow generation. Institutional investors and hedge funds will recognize the mispricing and move quickly.
# My Position
Unlike you, I have held BTI since 2023, and as of Friday's sell-off, it makes up over 90% of my portfolio. The remaining 5% is in Altria, its closest competitor. I have effectively bet my life savings on this company because the fundamentals remain solid, and the market’s reaction is detached from reality.
https://preview.redd.it/3pj4l0bdnjje1.png?width=506&format=png&auto=webp&s=95c34fa5b2ce6275b52b969962d60cec07e72114
https://preview.redd.it/dj6n2klenjje1.png?width=488&format=png&auto=webp&s=9d676abab442abd7aa8b950bb297dba45107cd70
# Cash Flow
A temporary 6 billion set aside for a lawsuit has caused an overreaction in the share price. A one-off payment to the Canadian government (yikes).BTI generates \~$10.75B in free cash flow per year. The provision is non-cash - a set-aside for future settlements. But do you know what a one-off payment doesn't affect, that's right - future discounted cash flow. Which is all hege fund sociopaths care about.
|**Metric**|**FY 2024**|**YoY Change**|
|:-|:-|:-|
||
|**Operating Cash Flow (OCF)**|$12.1B|**+3.9%**|
|**Free Cash Flow (FCF)**|$9.8B|**+4.2%**|
|**FCF Conversion Rate**|81.1%|**Stable**|
Illicit vape sales affected earnings last year in the short-term. They make up 60% of trade.
Why will this correct? Because illicit vape sales are directly stealing billions from the IRS. The FDA have announced a campaign to crack down on these Chinese imports, led by Trump's former director of national intelligence:
* [FDA & DOJ Multi-Agency Task Force](https://www.fda.gov/news-events/press-announcements/justice-department-and-fda-announce-federal-multi-agency-task-force-curb-distribution-and-sale)
* [FDA to Vape Companies](https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/compliance-actions-and-activities/warning-letters)
* [Florida Legislation on Illegal Vape Sales](https://floridapolitics.com/archives/661587-legislation-to-reign-in-illegal-chinese-disposable-vape-market-gains-momentum/)
* [Bloomberg Analysis on the Illicit Vape Market](https://www.bloomberg.com/news/features/2025-02-03/unauthorized-flavored-vapes-dominate-e-cigarette-use)
# Political Influence
A BTI subsidiary was the largest political donor to trump campaignin 2024 (BTI owns Reynolds which owns Reynolds American which owns RAI Services co.). The recent scrapping of the menthol ban and the upcoming vape restrictions disproportionately benefit Big Tobacco while eliminating smaller competitors.:
* [Forbes: Big Tobacco Was the Largest Political Donor in 2024](https://www.forbes.com/sites/alisondurkee/2024/12/27/this-tobacco-giant-was-the-biggest-corporate-donor-to-the-2024-presidential-race/)
#
# Boomers, index funds and hedge funds:
I know most of you don't have the patience to wait for 8% yearly returns, or let's be honest, even quarterly dividends. With a 7.23% dividend yield taxed at 0-15% for high-income thresholds, BTI is becoming an increasingly attractive play for pension funds, index funds, and hedge funds looking for undervalued cash flow machines.
# Competitor Analysis
|**Metric**|**BTI**|**PM (Philip Morris)**|**MO (Altria)**|**Industry Avg**|
|:-|:-|:-|:-|:-|
||
|| || |**P/E Ratio (Fwd)|6.1x**|**16.4x**|**8.2x**|**11.8x**|
|| || |**EV/EBITDA**|**7.0x**|**12.2x**|**9.8x**|**10.3x**|
|| || |**Dividend Yield**|\*\*9.1%**|**5.3%**|**8.8%**|**6.5%\*\*|
**We move**:
# Bull ThesIs Introduction - Prepping the bull
A lady, whilst leaving my apartment with me was complaining about her husband smoking. I told her to thank him for keeping the dividend war machine alive. And this, gentlemen is why i am all-in and quite literally bullish on BTI, British American Tobacco. Their CEO became the [highest paid CEO in Britain](https://www.ft.com/content/c97cc464-699e-4e01-a58d-b38ef68099e0) as reported by the FT literally whilst i was writing this Michael Burry tier analysis.
I provided due diligence where he told you to invest in Palantir in [2021](https://www.reddit.com/r/wallstreetbets/s/4OcGV8xelN). You paper handed. I I also provided due diligence on[ Seadrill distressed debt investment](https://www.reddit.com/r/wallstreetbets/comments/mjkexn/comment/gtaqtd6/) ([ i was righ](https://www.prnewswire.com/news-releases/seadrill-new-finance-limited-to-be-renamed-paratus-energy-services-ltd-the-issuer-announces-emergence-from-chapter-11-301465461.html)t). Time for the third:
British American Tobacco lost 10% of book value on Thursday and Friday. This is a company selling addictive products([inelastic goods](https://www.youtube.com/watch?v=COf2bQEQ7Zw)), with the highest profit margin of all US industries, the largest single largest donor to the Trump campaign pre-election and paying 7.62% annual dividend taxed at 0-15%.
The panicked selloff was triggered by 2 things:
* Illicit vape competition (countered by FDA/DOJ taskforce and political donations)
* Set-aside for a Canadian lawsuit(doesn't affect cashflow - also isn't settled).
Neither of these materially affects the firm’s long-term valuation or cash flow generation. Institutional investors and hedge funds will recognize the mispricing and move quickly.
# My Position
Unlike you, I have held BTI since 2023, and as of Friday's sell-off, it makes up over 90% of my portfolio. The remaining 5% is in Altria, its closest competitor. I have effectively bet my life savings on this company because the fundamentals remain solid, and the market’s reaction is detached from reality.
# Cash Flow
A temporary 6 billion set aside for a lawsuit has caused an overreaction in the share price. A one-off payment to the Canadian government (yikes).BTI generates \~$10.75B in free cash flow per year. The provision is non-cash - a set-aside for future settlements. But do you know what a one-off payment doesn't affect, that's right - future discounted cash flow. Which is all hege fund sociopaths care about.
|**Metric**|**FY 2024**|**YoY Change**|
|:-|:-|:-|
||
|**Operating Cash Flow (OCF)**|$12.1B|**+3.9%**|
|**Free Cash Flow (FCF)**|$9.8B|**+4.2%**|
|**FCF Conversion Rate**|81.1%|**Stable**|
Illicit vape sales affected earnings last year in the short-term. They make up 60% of trade.
Why will this correct? Because illicit vape sales are directly stealing billions from the IRS. The FDA have announced a campaign to crack down on these Chinese imports, led by Trump's former director of national intelligence:
* [FDA & DOJ Multi-Agency Task Force](https://www.fda.gov/news-events/press-announcements/justice-department-and-fda-announce-federal-multi-agency-task-force-curb-distribution-and-sale)
* [FDA to Vape Companies](https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/compliance-actions-and-activities/warning-letters)
* [Florida Legislation on Illegal Vape Sales](https://floridapolitics.com/archives/661587-legislation-to-reign-in-illegal-chinese-disposable-vape-market-gains-momentum/)
* [Bloomberg Analysis on the Illicit Vape Market](https://www.bloomberg.com/news/features/2025-02-03/unauthorized-flavored-vapes-dominate-e-cigarette-use)
# Political Influence
A BTI subsidiary was the largest political donor to trump campaignin 2024 (BTI owns Reynolds which owns Reynolds American which owns RAI Services co.). The recent scrapping of the menthol ban and the upcoming vape restrictions disproportionately benefit Big Tobacco while eliminating smaller competitors.:
* [Forbes: Big Tobacco Was the Largest Political Donor in 2024](https://www.forbes.com/sites/alisondurkee/2024/12/27/this-tobacco-giant-was-the-biggest-corporate-donor-to-the-2024-presidential-race/)
#
# Boomers, index funds and hedge funds:
I know most of you don't have the patience to wait for 8% yearly returns, or let's be honest, even quarterly dividends. With a 7.23% dividend yield taxed at 0-15% for high-income thresholds, BTI is becoming an increasingly attractive play for pension funds, index funds, and hedge funds looking for undervalued cash flow machines.
# Competitor Analysis
|**Metric**|**BTI**|**PM (Philip Morris)**|**MO (Altria)**|**Industry Avg**|
|:-|:-|:-|:-|:-|
||
|| || |**P/E Ratio (Fwd)|6.1x**|**16.4x**|**8.2x**|**11.8x**|
|| || |**EV/EBITDA**|**7.0x**|**12.2x**|**9.8x**|**10.3x**|
|| || |**Dividend Yield**|\*\*9.1%**|**5.3%**|**8.8%**|**6.5%\*\*|
**We move**:
# Bull ThesIs Introduction - Prepping the bull
A lady, whilst leaving my apartment with me was complaining about her husband smoking. I told her to thank him for keeping the dividend war machine alive. And this, gentlemen is why i am all-in and quite literally bullish on BTI, British American Tobacco. Their CEO became the [highest paid CEO in Britain](https://www.ft.com/content/c97cc464-699e-4e01-a58d-b38ef68099e0) as reported by the FT literally whilst i was writing this Michael Burry tier analysis.
I provided due diligence where he told you to invest in Palantir in [2021](https://www.reddit.com/r/wallstreetbets/s/4OcGV8xelN). You paper handed. I I also provided due diligence on[ Seadrill distressed debt investment](https://www.reddit.com/r/wallstreetbets/comments/mjkexn/comment/gtaqtd6/) ([ i was righ](https://www.prnewswire.com/news-releases/seadrill-new-finance-limited-to-be-renamed-paratus-energy-services-ltd-the-issuer-announces-emergence-from-chapter-11-301465461.html)t). Time for the third:
British American Tobacco lost 10% of book value on Thursday and Friday. This is a company selling addictive products([inelastic goods](https://www.youtube.com/watch?v=COf2bQEQ7Zw)), with the highest profit margin of all US industries, the largest single largest donor to the Trump campaign pre-election and paying 7.62% annual dividend taxed at 0-15%.
The panicked selloff was triggered by 2 things:
* Illicit vape competition (countered by FDA/DOJ taskforce and political donations)
* Set-aside for a Canadian lawsuit(doesn't affect cashflow - also isn't settled).
Neither of these materially affects the firm’s long-term valuation or cash flow generation. Institutional investors and hedge funds will recognize the mispricing and move quickly.
# My Position
Unlike you, I have held BTI since 2023, and as of Friday's sell-off, it makes up over 90% of my portfolio. The remaining 5% is in Altria, its closest competitor. I have effectively bet my life savings on this company because the fundamentals remain solid, and the market’s reaction is detached from reality.
# Cash Flow
A temporary 6 billion set aside for a lawsuit has caused an overreaction in the share price. A one-off payment to the Canadian government (yikes).BTI generates \~$10.75B in free cash flow per year. The provision is non-cash - a set-aside for future settlements. But do you know what a one-off payment doesn't affect, that's right - future discounted cash flow. Which is all hege fund sociopaths care about.
|**Metric**|**FY 2024**|**YoY Change**|
|:-|:-|:-|
||
|**Operating Cash Flow (OCF)**|$12.1B|**+3.9%**|
|**Free Cash Flow (FCF)**|$9.8B|**+4.2%**|
|**FCF Conversion Rate**|81.1%|**Stable**|
Illicit vape sales affected earnings last year in the short-term. They make up 60% of trade.
Why will this correct? Because illicit vape sales are directly stealing billions from the IRS. The FDA have announced a campaign to crack down on these Chinese imports, led by Trump's former director of national intelligence:
* [FDA & DOJ Multi-Agency Task Force](https://www.fda.gov/news-events/press-announcements/justice-department-and-fda-announce-federal-multi-agency-task-force-curb-distribution-and-sale)
* [FDA to Vape Companies](https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/compliance-actions-and-activities/warning-letters)
* [Florida Legislation on Illegal Vape Sales](https://floridapolitics.com/archives/661587-legislation-to-reign-in-illegal-chinese-disposable-vape-market-gains-momentum/)
* [Bloomberg Analysis on the Illicit Vape Market](https://www.bloomberg.com/news/features/2025-02-03/unauthorized-flavored-vapes-dominate-e-cigarette-use)
# Political Influence
A BTI subsidiary was the largest political donor to trump campaignin 2024 (BTI owns Reynolds which owns Reynolds American which owns RAI Services co.). The recent scrapping of the menthol ban and the upcoming vape restrictions disproportionately benefit Big Tobacco while eliminating smaller competitors.:
* [Forbes: Big Tobacco Was the Largest Political Donor in 2024](https://www.forbes.com/sites/alisondurkee/2024/12/27/this-tobacco-giant-was-the-biggest-corporate-donor-to-the-2024-presidential-race/)
#
# Boomers, index funds and hedge funds:
I know most of you don't have the patience to wait for 8% yearly returns, or let's be honest, even quarterly dividends. With a 7.23% dividend yield taxed at 0-15% for high-income thresholds, BTI is becoming an increasingly attractive play for pension funds, index funds, and hedge funds looking for undervalued cash flow machines.
#
**We move**:
https://preview.redd.it/fw24bprinjje1.png?width=683&format=png&auto=webp&s=d497287ce418b3560eee270f317d11c64021d1b2
https://preview.redd.it/jc2q3mbgnjje1.png?width=375&format=png&auto=webp&s=a4ca08dfc1b972d989646d6453b0235eb0f0876c
