Alliance One International, Inc. (AOI)

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

It's cheap, addictive & well.....this is just personal, but I like that it's politically incorrect.

Tracking some of my actual portfolio

its the kind of stock that really cant fail.very undervalued right now.yes alot of debt but debt isnt as volitale with tobacco companies because can you imagine a day when no one smokes?they will always have cash flow to pay their debt. earnings are pretty consisntant but the price is down alot.so basically get in itll go back up id say at least to ten within 2 years tops

Tobacco leafs make.....cigarettes. The world continues to smoke and probably smoke even more during this global recession. Also a Seth Klarman pick. Like the saying goes "Follow the smart money."

Kaskoosek!

has a composite of $350 million market value
"when you can buy cash flow, you gotta buy it"

so many are 'walking on eggs', tobacco is a defensive sector; a good hedge for many occasions

AllStarPortfolio, Kaskoosek. Tabacco. Look at that PE (if it's true)

On September 10, 2009 at 5:42 PM, Kaskoosek (99.76) wrote:

This company is a tobacco leaf merchant, which sells its produce to the largest and most famous tobacco companies.

You can directly realize that this company is hugely undervalued by looking at their financial ratios. p/e, p/b and ev/ebitda are all very attractive.

I have personally bought in RL at 3.92 and intend to hold for a long time. 5y

It is important to understand the macro enviroment we are living in. Let me say that smoking is first a recession proof industry, so even if they have a high debt load it is easily servicable, because revenues are going to be always there.

Another important caveat is the weakness in the dollar and the expected inflation in the future. Buying this company will offer great rewards exatcly due to the high debt and everyone will keep on smoking whatever the inflation rate. Making this company actually a steal. So buying this company is like buying silver at 4$ levered 10 times. How much money do you suppose you will make? My answer is a lot.

Let us say that 10 years from not all their debt is devalued away and their sales are still the same. This would be akin to buying a p/e ratio of less than 1, because their interest payments are higher than their market cap.

Sensible fundamentals in the tobacco industry.

Does a multiple of 3x FCF make sense for a company that has rapidly rising revenues, margins, and free cash flow?
Consider that this tobacco leaf processor operates in an oligopoly, as well as a fundamentally recession resistant industry that is highly defensive in nature.

In addition, AOI's free cash generating capibilities are strong and getting stronger (as internal restructuring initiatives begin to gain traction). Revenues are rising (due to a healthy and growing global cigarette market) and Margins are expanding (due to mgmt's multiple levers aimed at improving ROIC and lowering their cost of capital), therefore profits are exploding. Really, 3x FCF? This business derserves half the multiple of no growth, terrible business? I think not.

Although they do have a decent chunk of high cost debt, cash from operations is significantly above their interest costs and none of their debt comes due until '12. Mgmt has been and continues to be focused on buying back its debt to lower its cost of capital, and assuming the credit markets begin to thaw and mgmt is able to refinance at a lower rate...the debt load will become a complete non-issue.

The bottom line here is that given a few more quarters of record sales and earnings, Mr. Market will come to his senses and award a higher multiple on higher profit's...driving hugely outsized risk-adjusted returns for years to come. Outperform.

bottomm end here look for huge next month with the development of asia india and aoi moving in these markets means huge gains should reach 12 by years end

its down

Hate the product, but this stock will rebound and do well in the short-term.

undervalued tobacco leaf wholesaler stock.

tobacco use will never be stopped and this company tends to be ahead of the pack

.. tobacco stocks have been on a tear lately ..

picked this stock by doing lots of research. i hope that it flies/