Big Tobacco remains attractive because scale lowers unit costs and nicotine substitution can shift consumption beyond cigarettes. Cigarettes are homogeneous, so volume lowers costs; Sweden's shift to snus and nicotine pouches shows where consumption can move. The screen ranks tobacco among the strongest subsectors on fundamentals and market pricing. x.com  x.com  x.com  x.com 

British American Tobacco is a cigarette turnaround story nobody is talking about, with the stock up 100% in 18 months while paying a 6-10% dividend. x.com 

British American Tobacco carries cannabis optionality that few big companies admit to, and Big Tobacco will lean into cannabis hard rather than pull back. BAT describes a "foothold in the cannabis space" that is "several years away from being a meaningful contributor". @UseThouBrain, in the post being answered, backs Organigram on the view that BAT's idea of meaningful means billions, backed by patent-pending non-combustible IP; that is a different bet, far down the field, but not a bad one. … Show more

Philip Morris offers profits outside everybody's favorite ten hyperscale stocks. On a walk around New York's East Village, literally every young woman seemed to be smoking a cigarette, Midwestern transplants as well as alternative crowds. Per Threadguy, the stock is quietly at all-time highs near $194 as vaping became embarrassing and Zyn took over. x.com 

Philip Morris is collecting the inheritance as nicotine moves from cigarettes to smoke-free products, after choosing a decade ago to replace its own core business. Smoke-free is now 40% of revenue, ZYN and IQOS grow 20%+ a year, and each smoke-free pack brings 2.5 times a cigarette's revenue. Sweden shows the path: under 5% of Swedes smoke daily after switching to snus and pouches. The $16B Swedish Match deal in 2022, called overpriced, made ZYN America's fastest-growing oral tobacco product. … Show more

Turning Point Brands looks extremely interesting after falling about 60% from its highs, as it has become almost a pure play on nicotine pouches over the past two years. The new CEO may kitchen-sink results and the chart is unattractive, but betting on a materially lower price before upcoming catalysts play out looks increasingly poor. x.com 

Topicus should borrow to buy back its stock, because it can borrow for less than its free-cash-flow yield at this price. Deployments are very weak this year, even though Topicus has the widest moat, the safest balance sheet and the lowest leverage. Management is wrong not to use debt for buybacks here, and the issue has been raised directly with the companies. x.com  x.com 

Turning Point Brands is one of the best setups as its expansion comes faster than expected. Line of sight to $2bn revenue in 2030 should put the stock about 7x higher. Per @SnubieDotCom, its Alp pouch is expanding outside the US with new strengths and flavors in the EU. Its marketing genius suits a market where marketing is basically forbidden, and it has stolen share from large incumbents before. Downside is about $30 a share, roughly 60% lower, if Alp and FRE are banned outright. x.com  x.com 

Snap shows that dilution does matter to shareholders over the long term. x.com 

Atlassian is far less cash-rich than it looks once stock-based compensation is treated as a real cost. About $1.3 billion of operating cash flow and only $50 million of capex look strong, but roughly $1.5 billion of SBC is the real spend, $165 million more than operating cash flow. Paying employees in stock flatters cash flow while diluting shareholders, and buybacks only partially offset SBC rather than reducing the share count. x.com  x.com