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The Company through its direct and indirect subsidiaries, is engaged in the manufacturing and marketing of consumer products in the following business segments: Smokeless Tobacco Products, Wine and All Other Operations.
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DemonDoug (99.65) Submitted: 8/23/07 5:30 PM : Start Price: $46.65 UST Score: 64.90
Tobacco will continue to profit all companies in the industry. So why UST right now?Shares dropped near 52-week lows with news that Altria (MO) is testing a smokeless tobacco product that will be significantly priced less than UST's offerings. While there may be some pressure on UST's margins with increased competition, their brands, quality, and market positions are very strong.This company has been around for almost 200 years, and also has a strong international presence, further adding to potential windfalls if the US economy and dollar fall.UST pays a solid 5% dividend yield, so any further weakness in share price will be mitigated by the dividend. My research only goes back 7 years, but in 7 years UST has paid a dividend every quarter, and has increased their dividend every year since 2000.Finally, I am bullish on tobacco because tobacco is a cash crop, and is such is subject to market fluctuations of currencies. This gives you a hedge against falling US dollars, as profits will increase with the price increase of tobacco, as well as aforementioned international sales will be repatriated to US dollars with a favorable exchange rate.
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traderArdor (< 20) Submitted: 8/24/07 3:55 PM
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Dear DemonDoug, I've been looking for a way to email you directly on caps, but I can't seem to find it. I'm uneducated when it comes to investing, and am a fan of all your posts. I have a question.If UST pays a solid 5% dividend yield per quarter, and lets pretend that their socket price does not change all year, That means I get a 20% yearly return on my investment on dividends alone correct? if I had 100 dollars, in stock, at the end of the year, i would have 100 dollars in stock and 20 dollars cash from dividends.Thanks for your time-TraderArdor
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JeremyBear (< 20) Submitted: 8/27/07 6:52 PM
Yield is in annual terms. So for 100 dollars in a $50 stock w/a 4.8% yield for you would receive $4.80 If the dividend pay-out remains the same for UST you would receive .60 cents for each share you own on a quarterly basis. For a good visual representation check out the one-year chart at http://finance.google.com/finance?q=ust and make sure your settings are set to display dividends. Regards, JeremyBearhttp://newwealth.blogspot.com
luthert (< 20) Submitted: 9/11/07 12:37 PM
I'm trying to match Caps with my actual investments. So this CAPS entry is more an acknowledgement of the past than a current investment thesis.I've had UST for several years now and it has done famously. The tobacco lawsuit settlement created a federally maintained oligopoly on this drug and limited it to the existing players. I picked UST because it was smokeless, and less likely to get hit by future legal attacks.
DemonDoug (99.65) Submitted: 9/09/08 1:56 PM
Chalk up another winner for the Demon. If I ever get back into the top 10, I want it to be known that I can pick things like this on the long side. Finding solid companies with long histories and solid dividend and shareholder-friendly policies make great investments if the underlying fundamentals of the business are there, and they were there for UST. Much less risk with much higher possibilities to gain than by trading long and short on highly volatile stocks every day.
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