They say that you should be able to summarize your thesis in a few sentences and be able to explain it to a child. Well if that alone leads to high returns, then I’m gonna be rich because I don’t even need a few sentences, I only need a few words! Here they are:
Hey this was an interesting and well thought out article. Im confused about how you calculated the average earnings:
Over a 10-year period, Altria has earned on average $5.6B a year. Over the past 5-years they have earned $7B (including losses in 2019). With a $72B market cap, this is roughly 10.5x - 13x average earnings.
Out of curiosity, how did you generate your bar graphs, they look similar to python modules pyplot or matlablib.
Thank you for taking the time to read my post, I really appreciate the feedback and questions! Please share it with anyone you think would be interested in it.
The $5.6B is the average of all net income reported from 2010-2019. In year 2019, they reported net income of -$1.3B as a result of the impairments (mind you, operating income was at an all time high of $10.3B during this period) this obviously lowers the average since this negative number is very irregular. The $7B is the average of all net income reported during 2015-2019 (again, including the -$1.3B loss in 2019).
If we take the market cap of $72B and divide it by $5.6B (10-year avg) we get ~13x earnings and if we take $72B and divide it by $7B (5-year avg) we get ~10x. And thus, Altria is trading at roughly 10x - 13x "normal" (average) earnings.
On a trailing twelve month basis, Altria is already back to "profitability" with $727M in net income since impairments are much lower in 2020 than in 2019.
As far as the bar graphs go, I am using excel to get them. Just highlight the numbers you want graphed and then click the insert tab and click graphs to see the options.
Maybe I should have elaborated on the math behind these numbers, but I don't want to make the blog posts any longer than they already are, but I am happy to answer them here!
I hope this helps. If you have any more questions, feel free to ask them :)
Hey this was an interesting and well thought out article. Im confused about how you calculated the average earnings:
Over a 10-year period, Altria has earned on average $5.6B a year. Over the past 5-years they have earned $7B (including losses in 2019). With a $72B market cap, this is roughly 10.5x - 13x average earnings.
Out of curiosity, how did you generate your bar graphs, they look similar to python modules pyplot or matlablib.
Thank you for taking the time to read my post, I really appreciate the feedback and questions! Please share it with anyone you think would be interested in it.
The $5.6B is the average of all net income reported from 2010-2019. In year 2019, they reported net income of -$1.3B as a result of the impairments (mind you, operating income was at an all time high of $10.3B during this period) this obviously lowers the average since this negative number is very irregular. The $7B is the average of all net income reported during 2015-2019 (again, including the -$1.3B loss in 2019).
If we take the market cap of $72B and divide it by $5.6B (10-year avg) we get ~13x earnings and if we take $72B and divide it by $7B (5-year avg) we get ~10x. And thus, Altria is trading at roughly 10x - 13x "normal" (average) earnings.
On a trailing twelve month basis, Altria is already back to "profitability" with $727M in net income since impairments are much lower in 2020 than in 2019.
As far as the bar graphs go, I am using excel to get them. Just highlight the numbers you want graphed and then click the insert tab and click graphs to see the options.
Maybe I should have elaborated on the math behind these numbers, but I don't want to make the blog posts any longer than they already are, but I am happy to answer them here!
I hope this helps. If you have any more questions, feel free to ask them :)
Thanks for taking the time to confirm for me! I was guessing that was how it was calculated but i didnt realize it was rounded at the end.
BTW I found this page from FB groups. I look look forward to more as a subscriber.
Thank you for your time! Hopefully i can continue to make it worth while for you. Cheers.