Core Viewpoint - Constellation Brands and Altria are both considered stable blue chip stocks, but Altria has outperformed Constellation significantly over the past three years, raising questions about future investment potential [1][2]. Constellation Brands - Constellation Brands generates most of its revenue from its beer business, with popular brands like Modelo and Corona, and a smaller portion from wine and spirits [4]. - The company faces three major challenges: declining beer consumption among younger consumers, decreasing sales of lower-end wines, and increased costs due to tariffs on imported Mexican beers [5][6]. - Analysts expect Constellation's revenue to decline from $10.2 billion in 2024 to $9.9 billion in 2027, while its earnings per share (EPS) is projected to grow at a compound annual growth rate (CAGR) of 7% [8]. - Despite a low valuation at 14 times forward earnings and a forward yield of 2.5%, the lack of near-term catalysts makes it an unappealing investment [9]. Altria - Altria primarily generates revenue from its Marlboro cigarettes and has a strong domestic focus, which protects it from tariffs and foreign-exchange issues [10][11]. - The company has been countering declining smoking rates by raising cigarette prices, cutting costs, and expanding its smokeless product portfolio through investments and acquisitions [12]. - Following a setback with its investment in Juul, Altria acquired Njoy for $2.8 billion in 2023, which is expected to boost EPS starting in 2026 [13]. - Analysts predict Altria's revenue will dip slightly from $20.4 billion in 2024 to $20.2 billion in 2027, but its EPS is expected to grow at a steady CAGR of 5% from 2025 to 2027 [14][15]. - Altria's stock is considered cheap at 12 times forward earnings, with a substantial forward yield of nearly 7%, making it a more stable investment compared to Constellation [15]. Investment Recommendation - Altria is viewed as the better investment option due to its more stable business model, larger dividend, and lower valuation multiple compared to Constellation Brands [16].

Group 1 - Altria Group (NYSE: MO) is a major tobacco company that focuses solely on the American market, owning brands like Marlboro which dominates this market [1] - The company spun off Philip Morris International to concentrate on its domestic operations [1] - The analyst expresses a focus on undervalued and disliked companies with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1] Group 2 - The analyst has a long-term value investing approach but also engages in deal arbitrage opportunities [1] - There is a noted skepticism towards high-tech businesses and certain consumer goods, with a preference for more traditional products [1] - The analyst does not understand the appeal of investing in cryptocurrencies [1]

Core Viewpoint - The tobacco industry is evolving into the nicotine industry, with Altria Group and British American Tobacco being key players, but British American Tobacco is currently better positioned for growth and market share in smokeless products [2][10][12]. Company Comparison - Altria and British American Tobacco both offer high dividend yields around 7% and have similar financial metrics, but their growth prospects differ significantly [2][5]. - Altria primarily operates in the U.S. with its Marlboro brand, while British American Tobacco has a global presence and competes mainly with Philip Morris International [4]. Financial Health - Both companies generate sufficient free cash flow to cover dividends and have significant stakes in other companies, with Altria's stake in Anheuser-Busch InBev valued at approximately $11 billion and British American Tobacco's stake in ITC Limited valued at around $16 billion [7]. Industry Adaptation - The decline in traditional cigarette use has prompted both companies to invest in smokeless nicotine products, with British American Tobacco leading in the electronic vape market with a 40% market share and 13.2% of total revenue from new product categories in 2024 [9][10]. - Altria has struggled with its investments in smokeless products, reporting only $300 million in sales from new categories in 2024, which is just 1.2% of its total revenue [11]. Market Dynamics - The U.S. government’s crackdown on illegal vape products benefits both companies, but British American Tobacco is expected to gain more due to its strong market share in vaping [14]. - Altria faces challenges in maintaining its market leadership in next-generation nicotine products, which could weaken its business as cigarette volumes decline [15].

Group 1: Market Trends - After the tariff announcement on April 2, the US stock market quickly priced in a recessionary regime, eliminating the possibility of a "Goldilocks" (moderate growth) scenario. This trend has since reversed, with the probability of the Goldilocks regime returning to March's average level [1] - The Purchasing Managers' Index (PMIs) continues to decline, while OECD leading indicators show the economy remains in a late cycle but has not yet exited the expansion phase. The REVS regime favors late-cycle defensive sectors like communication services, but as leading indicators weaken, preferences may shift more towards utilities [2] Group 2: Earnings Adjustments - Almost all sectors have seen downward revisions in sales and earnings expectations, but the pace of these adjustments has slowed. The sectors with the largest downward revisions include automotive, durable goods, and building materials. The dispersion in earnings scores indicates the presence of alpha opportunities in the market [3] Group 3: Valuation Insights - Forward price-to-earnings ratios have mostly rebounded, returning to a "growth optimism" range. The US stock market's valuation remains higher than other global regions, with dollar-denominated earnings outperforming Europe by 10%, exceeding long-term trends [4] Group 4: Sentiment Analysis - Utilities and consumer staples sectors maintain positive sentiment. UBS crowding data indicates a persistent overweight position in the US market, although it has decreased from March's peak. The significant rotation from cyclical consumer stocks (durable goods and automotive) to defensive sectors (like consumer staples) has not fully normalized [5] Group 5: Top and Bottom Rated Stocks - The highest-rated stocks based on the REVS framework include Intercontinental Exchange, Virtu Financial, and Broadcom, with price changes since March 31 ranging from 10.9% to 37.3% [6] - The lowest-rated stocks include Ziprecruiter, Bioxcel Therapeutics, and Jetblue Airways, with price changes since March 31 ranging from 0% to 3.6% [7]

Group 1: Berkshire Hathaway and Warren Buffett - Warren Buffett, after 60 years of leadership, announced that Greg Abel will become CEO of Berkshire Hathaway by the end of the year [1] - Buffett has significantly outperformed the S&P 500, essentially doubling its annual return over his career [2] - Berkshire Hathaway is known for its stability and has outperformed the S&P 500 during recent market volatility [5] Group 2: Altria - Altria has a strong historical performance, particularly in down markets, and is currently the domestic seller of Marlboro and other cigarette brands [8] - The company benefits from a recession-resistant business model, with a high-yield dividend and a record of raising dividends 59 times in the last 55 years [9] - Altria's stock is up 16.6% this year, outperforming both Berkshire and the S&P 500, and has shown resilience during past bear markets [10][12] Group 3: AutoZone - AutoZone operates in the aftermarket auto parts sector, which tends to perform well during recessions as consumers prioritize repairs over new vehicle purchases [17] - The stock is up 17.8% year to date and has historically thrived during bear markets, gaining 22% during the financial crisis [18][19] - AutoZone has a pattern of accelerating sales towards the end of recessions, indicating strong potential for future performance [21][23] Group 4: Investment Considerations - Despite a recent 5% decline in Berkshire stock following Buffett's retirement announcement, the company remains a strong long-term investment due to its cash reserves of nearly $350 billion [24] - Investors looking to capitalize on potential bear markets may find Altria and AutoZone to be more attractive options based on their historical performance and business models [25]

Core Insights - Outbrain Inc. reported strong financial results for Q1 2025, achieving guidance on Ex-TAC gross profit and Adjusted EBITDA, with CTV revenues growing over 100% year-over-year on a pro forma basis [1][2] - The company completed the acquisition of Teads for approximately $900 million, which is expected to yield significant synergies and integration benefits [4][21] - Full-year guidance for 2025 remains positive, with expectations for continued growth and strategic partnerships [6][7] Financial Performance - Revenue for Q1 2025 was $286.4 million, a 32% increase from $217.0 million in Q1 2024 [2][5] - Gross profit reached $82.7 million, up 99% from $41.6 million in the prior year, with a gross margin increase to 28.9% [2][5] - Ex-TAC gross profit was $103.1 million, a 98% increase year-over-year, with an Ex-TAC gross margin of 36.0% [2][5] - The net loss for the quarter was $54.8 million, compared to a net loss of $5.0 million in Q1 2024, influenced by acquisition-related costs and restructuring charges [2][5] Business Highlights - The integration of Teads is on track, with expected synergies of $65 million to $75 million by 2026, including $40 million in cost synergies for 2025 [4][6] - The company has initiated cross-selling of legacy Outbrain solutions to Teads' enterprise brand customers, with several campaigns already sold [4] - New strategic partnerships have been established with major brands such as Ferrero and Philip Morris International [4] Guidance and Future Outlook - For Q2 2025, the company expects revenue of $286.4 million, with continued strong adoption of its Moments vertical video offering [6] - Full-year guidance for 2025 includes Ex-TAC gross profit expectations of $141 million to $150 million and Adjusted EBITDA of $26 million to $34 million [6][7] - The company is focused on leveraging predictive AI technology to enhance its advertising platform and drive business outcomes [21]

Core Viewpoint - Altria Group has maintained a strong dividend history, raising its dividend annually since 2009, with a current forward yield of 7%, but concerns exist regarding the sustainability of this dividend amid declining cigarette volumes and competition from alternative products [1][11]. Revenue and Volume Analysis - Cigarette smoking in the U.S. is declining due to health concerns and the rise of alternatives like vaping, with Altria's cigarette shipment volumes down 13.7% in Q1, including a 13.3% drop for Marlboro and a 24.9% plunge in discount brand shipments [2][3]. - Revenue from the smokeable segment fell 4.1% to $3.91 billion, although adjusted operating income rose 2.7% due to lower manufacturing costs [4]. - In the oral tobacco segment, shipment volumes decreased by 5% to 175.4 million cans, with overall revenue rising by 0.5% to $654 million, but adjusted operating income remained flat [5]. - Altria's Njoy vaping business saw consumable shipments increase by 23.9% to 13.5 million units, but device shipments fell 70% to 0.3 million units, indicating a mixed performance in the vaping segment [6]. Financial Health and Dividend Safety - Altria generated $2.72 billion in operating cash flow and $2.68 billion in free cash flow in the quarter, with a dividend payout of $1.73 billion, resulting in a coverage ratio of over 1.5 times based on free cash flow [9]. - The company ended the quarter with net debt of $21.3 billion and a leverage ratio of 1.7 times, indicating manageable debt levels [9]. Future Outlook - Altria maintained its full-year guidance for adjusted EPS between $5.30 and $5.45, reflecting growth of 2% to 5%, while acknowledging the impact of increased tariffs and cost inflation on consumer behavior [7]. - There are concerns that continued price increases may not be sustainable in the face of declining volumes, which could affect long-term profitability [10][12]. Market Position and Valuation - Altria's stock has performed well in a volatile market, but the overall cigarette business is declining, and its smoke-free products are not yet significant enough to offset this trend [11]. - The company trades at a forward P/E ratio of 11 based on 2025 analyst consensus, which is higher than British American Tobacco but lower than Philip Morris International, which is experiencing growth without facing similar volume declines [13].

Core Viewpoint - British American Tobacco (BAT) is emerging from a challenging decade and is positioned to potentially outperform the market moving forward, despite the inherent risks associated with tobacco investments [1][2][3]. Company Performance - BAT has faced significant challenges over the past decade, including a tumultuous market environment and the consequences of a costly merger with Reynolds American, which resulted in a $31.5 billion non-cash write-down on its U.S. cigarette brands in late 2023 [3][10]. - The stock has shown a 43% increase over the past year, although it remains down 25% from a decade ago, indicating a potential shift in market sentiment towards a more favorable outlook for the company [11]. Revenue and Growth - BAT's new category products, including electronic cigarettes and heated tobacco, have seen organic, currency-neutral sales growth of 8.9% in 2024, contributing to 17.5% of total revenue [4]. - Management anticipates annualized currency-neutral revenue growth of 3% to 5% starting in 2026, which, while modest, represents a recovery path from previous declines [5]. Dividend and Cash Flow - The company offers a nearly 7% dividend yield, providing attractive short-term returns, especially during periods of market volatility [2][6]. - In 2024, BAT generated £7.9 billion in free cash flow and paid out £5.2 billion in dividends, resulting in a payout ratio of 66%, indicating a healthy cash flow position [8]. Valuation and Market Position - BAT's stock valuation has improved, currently trading at under 10 times 2025 earnings estimates, which is a significant recovery from a low of under 8 times earnings early last year [12]. - The company’s strategic focus on transitioning to smoke-free products positions it favorably against competitors, although it still trails Philip Morris International in this area [4][10].

Core Viewpoint - Altria remains an attractive investment for income investors due to its long history of dividend increases and its current high dividend yield of 7% [1][14] Company Strategy - Altria has faced challenges over the past decade due to declining smoking rates and strategic missteps, including a $12 billion investment in Juul and a failed investment in Cronos Group [5] - The company has shifted focus to smoke-free products, selling the rights to market Iqos back to Philip Morris International and investing in Njoy, which has received FDA marketing authorization for its pod-based e-vapor product [6][8] - Altria's next-gen portfolio includes on!, an oral nicotine pouch, and a new heated tobacco product called Ploom, developed in partnership with JT Group [7] Market Performance - Njoy's consumables saw a 15.3% increase to 12.8 million units, and device shipments rose 22.2% to 1.1 million, with retail market share nearly doubling to 6.4% [8] - Despite Njoy's growth, cigarettes still account for the majority of Altria's revenue, with volume sales declining from 76.4 million in 2023 to 68.6 million in 2024, while smokeable products represented 88% of revenue in 2024 [9] Future Goals - Altria aims for a mid-single digits adjusted earnings per share (EPS) compound annual growth rate (CAGR) off $4.84 in 2022, with adjusted EPS rising 3.4% to $5.12 in 2024, resulting in a 2.9% CAGR over the last two years [10] - The company plans to increase its dividend by mid-single digits annually, following a 4.1% increase in 2024, and targets a debt-to-EBITDA ratio of 2, currently at 2.1 [11] - Altria expects to maintain an adjusted operating margin of at least 60% through 2028, although it has struggled to meet growth targets and has adjusted its expectations for Njoy's cash flow contributions [12] Investment Outlook - Altria's stock trades at a price-to-earnings ratio of 12, with a 7% dividend yield, indicating potential for success even if not all 2028 goals are met [13] - In the current economic climate, Altria is positioned to potentially outperform the S&P 500, benefiting from its status in the consumer staples sector and the consistent demand for its products [14] - Overall, despite declining cigarette consumption, Altria is expected to be in a better position three years from now [15]

Core Insights - ArcStone Securities and Investments Corp. serves as the exclusive financial advisor to Mangoceuticals Inc. in its acquisition of Smokeless Technology Corp., marking Mangoceuticals' entry into the high-growth oral stimulant pouch sector [1][2][3] - The acquisition enhances Mangoceuticals' capabilities in the consumer-packaged goods sector, targeting various demographics including athletes and Gen Z consumers seeking healthier alternatives [3][6] - The transaction is expected to position Mangoceuticals as a leader in the next-generation health and wellness delivery market, leveraging Smokeless Tech's intellectual property and formulations [6][7] Company Overview - Mangoceuticals Inc. is focused on launching high-impact pouches and aims to disrupt traditional wellness delivery methods with "better-for-you" energy solutions [6][7] - The company is set to benefit from the expertise of Tim Corkum, a veteran from Philip Morris International, who will lead the new Pouch Division [4][5] - The acquisition positions Mangoceuticals as one of the few public companies in the functional wellness and oral delivery market, appealing to both institutional and retail investors [8] Strategic Implications - The deal signifies a transformational step for Mangoceuticals, aligning with the trend towards on-the-go, clinically informed wellness solutions [7] - ArcStone's role underscores its expertise in cross-border M&A, particularly in the health and wellness sectors, enhancing its reputation in the financial advisory landscape [3][9] - The combined entity will focus on sourcing disruptive ingredients and proprietary formulations, aiming to lead in the wellness delivery category [6][7]