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. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

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!