An Insider Bought Another Pack of Philip Morris International

Page 1 of 2

Sergio Marchionne, who is a member of the Board of Directors at Philip Morris International Inc. (NYSE:PM), bought 1,000 shares of the $150 billion market cap cigarette company’s stock on February 20th at an average price of $92.20 per share. Our database of insider trading filings shows that Marchionne has been buying the stock frequently in the last year, with his most recent purchase coming last November at an average price of $88.82 per share. Research more of Marchionne’s insider transactions. Our impression is that it is economically irrational for insiders to buy shares of their company’s stock, increasing their company-specific risk and reducing diversification, unless they truly believe that the stock is undervalued. This is an explanation for why stocks bought by insiders tend to beat the market (read more about studies on insider trading).

Philip Morris International Inc. markets the Philip Morris brands (such as Marlboro) in international markets following the breakup of the company several years ago; the rest of the parent company’s business is run by Altria Group, Inc. (NYSE:MO). Sales were up slightly last year compared to 2011, and earnings growth was very modest as well. Earnings per share were up 7% largely on buybacks; between share repurchases and dividends, Philip Morris International returned almost $12 billion in cash to shareholders over the course of 2012. This compared to $9.4 billion in cash flow from operations with the balance coming from issuance of debt.

We’ve already mentioned generous dividend payments by the company in terms of its cash flow, and the yield is currently just shy of 4%. We would note that at a beta of 0.9 Philip Morris International Inc. is not as defensive as might be expected for a cigarette company. The trailing earnings multiple of 18 is not particularly high but we would want to see better earnings growth, even with further repurchases, to consider the stock on a value basis.

Ken Fisher - FISHER ASSET MANAGEMENT

Looking at our database of 13F filings for December 2012 (which we also use to develop investing strategies, including the fact that the most popular small cap stocks among hedge funds produce an average excess return of 18 percentage points per year), we can find a number of funds and other notable investors reporting a position in Philip Morris. Billionaire Ken Fisher’s Fisher Asset Management had 5.7 million shares in its portfolio at the end of the year (see Fisher’s stock picks). Renaissance Technologies and D.E. Shaw each added shares during the fourth quarter of 2012; those two funds were founded by billionaires Jim Simons and David Shaw, respectively. Find Renaissance’s and D.E. Shaw’s favorite stocks.

How does Philip Morris International compare to its peers?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!