Philip Morris - A Stock For Wealth Or Poverty (MO) Message Board

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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO)

MO 58.69

+0.6%

Nov 26 3:59 PM EST

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To: RWilson who wrote (1376)	4/14/1998 2:28:00 AM
From: Rarebird	Read Replies (1) of 6439

" We are gathering info and trying to assess valuation parameters". Good. So tell me, what is the value of MO's food and beverage business? I think it's worth $36.25 to $40 a share ( Read post #1285 ). Are you trying to argue that MO's domestic and international tobacco business is worth nothing? To be sure, that is the value the market is placing on it these days and that's why I have been an aggressive buyer under $40! No one has any inkling here about what type of excise taxes or penalties will be imposed by a settlement! Not only is any type of settlement questionable here, but it is questionable whether Congress will be able to pass anything substantial at all! We are in the realm of the unknown, what the Street calls Uncertainty. And you want to place a valuation parameter on the effects of what may or may not be passed by Congress. I will stick with what I do know here rather than speculate on the unknown. Given the value of MO's food and beverage business, I think we are already pretty close to the bottom of MO's stock price. ( MO is earning tons of money in their international tobacco business.) We are right now in the midst of maximum pessimism in regard to the tobacco industry. Your preoccupation in comparing MO's valuation after Marlboro Friday with the PE today sounds akin to the bearish claims that the market would fall once the dividend yield on the S&P fell below 3%! The valuation back then was of course cheaper for just about every stock! MO's MULTIPLE IS ONE OF THE LOWEST AROUND IN THIS STOCK MARKET! " I think you have to show liability relief"? I think not, considering that everything is up in the air here and nothing is certain as to the outcome! ( MO need not pay a penny here except for cases it loses in court.) Moreover, those analysts you take so seriously at Merrill and Goldman are short term players and speculators who have no advantage over a 25 year old MBA in this uncharted territory that the tobacco industry finds itself embroiled in! It is a mistake to reduce or lower estimates on factors that may never get realized. You have every right to be upset and angry. But don't panic. The fight has just begun in earnest. The battle lines are just begginning to get drawn here.

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