MO/Soma - Yeah, I think they paid a ridiculous amount but, on the other hand, MO looks at how people consume pot and it's mostly vaping and vaping saves them incredible amounts of packaging costs and lets them introduce flavors, etc and, eventually, THC too. So I can see why MO wanted to lock them up though I know a company in China that is much better for 1/10th the price (Kind, we work with them at New Age, as well a Juul).
Good time for a value lesson. MO drops $8Bn to the bottom line and $50 is $92Bn so, even if we assume Juul is worthless and will not increase sales and will not increase profits and they burned the whole $18Bn - then call it $1.8Bn a year for 10 years off profits and that makes profits $6Bn and a 15 p/e takes care of the market cap. So 25% of the profits at risk and we're down from $66 to $50 so 24% makes this right in-line with the worst-case scenario.
| Year End 31st Dec | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | TTM | 2018E | 2019E | CAGR / Avg | |
| $m | 24,611 | 24,466 | 24,522 | 25,434 | 25,744 | 25,576 | 25,351 | 19,658 | 19,921 | +0.8% | |
| $m | 6,379 | 7,000 | 7,576 | 8,138 | 21,787 | 9,993 | 9,480 | +9.4% | |||
| $m | 4,180 | 4,535 | 5,070 | 5,241 | 14,239 | 10,222 | 10,679 | 7,573 | 8,051 | +19.6% | |
| $ | 2.06 | 2.26 | 2.56 | 2.67 | 7.28 | 3.56 | 3.92 | +11.6% | |||
| $ | 2.38 | 2.63 | 2.59 | 2.84 | 0.033 | 3.49 | 4.07 | 4.00 | 4.32 | +8.0% | |
| % | +25.4 | +10.4 | -1.6 | +9.6 | -98.8 | +10,518 | +28.6 | +14.5 | +7.99 | ||
| x | 14.4 | 12.4 | 12.6 | 11.7 | |||||||
| x | 1.00 | 0.86 | 1.58 | 1.54 | |||||||
| Profitability | |||||||||||
Of course my long take on MO is based on their eventual entry into cannabis, which could easily double their $25Bn in sales and $8Bn in profits so I think it's a very good deal down here.
