Industry Overview - The tobacco industry is undergoing significant transformation due to declining cigarette volumes, rising health awareness, and evolving regulatory frameworks [2] - Companies are competing not only on brand strength but also on their ability to innovate with alternatives like heated tobacco and nicotine pouches [2] Altria Group, Inc. (MO) - Altria's adjusted earnings per share (EPS) rose 8.3% year over year to $1.44 in Q2 2025, supported by higher pricing, cost efficiencies, and share repurchases [5] - Revenues net of excise taxes were $5.29 billion, indicating portfolio stability [5] - Management raised the lower end of its 2025 adjusted EPS guidance to $5.35-$5.45, reflecting a growth rate of 3% to 5% [5] - Shipments of the on! nicotine pouch brand increased by 26.5% to 52.1 million cans, capturing an 8.7% retail share of the U.S. oral tobacco market [6] - The smokeable products segment showed resilience with adjusted operating income rising 4.2% and margins expanding 290 basis points to 64.5% [7] - Marlboro maintained a 59.5% share in the premium category, highlighting brand strength [7] Philip Morris International Inc. (PM) - Philip Morris' smoke-free products accounted for 41% of total net revenues in Q2 2025, growing 15.2% year over year [10] - The traditional cigarette business remains resilient, with combustible net revenues growing 2.1% in Q2, driven by price increases [11] - Management lifted its full-year adjusted EPS guidance to $7.43-$7.56, indicating 13-15% growth [13] - The company achieved over $500 million in gross cost savings in H1 2025, aiming for $2 billion in efficiencies by 2026 [12] - Cigarette shipment volumes declined 1.5% year over year to 155.2 billion units in Q2, with a forecasted 2% decrease for the full year [14] Comparative Analysis - The Zacks Consensus Estimate for Altria's 2025 EPS is $5.39, implying a year-over-year increase of 5.3% [15] - Philip Morris' consensus estimate remains at $7.50, indicating growth of 14.2% for 2025 [15] - Altria stock advanced 15.2% in the past month, outperforming Philip Morris' 8.9% gain [16] - Altria trades at a forward P/E multiple of 12.29, while Philip Morris carries a premium multiple of 21.25 [16] Investment Outlook - Philip Morris is viewed as the stronger long-term investment due to its global scale and leadership in smoke-free innovation [19] - Altria remains attractive for income-oriented investors but is seen as less favorable for sustained growth compared to Philip Morris [19]

Group 1: Market Trends and Indicators - Investors face challenges in deciding when to sell winning stocks, balancing profit-taking with the risk of missing out on further gains [1] - Technical analysis, including indicators like the Relative Strength Index (RSI), can help predict short-term price movements that fundamental metrics may not capture [2][3] - The RSI measures trend strength over a 14-day period, with thresholds indicating overbought (70) and oversold (30) conditions, aiding traders in identifying potential pullbacks [5][4] Group 2: Company-Specific Insights - Reddit Inc. (RDDT) has seen significant stock price growth, reaching $224 from an initial $50, driven by strong earnings and investor enthusiasm, with Q2 2025 earnings at $0.45 per share and revenue of nearly $500 million, a 78% year-over-year increase [8][9] - Altria Group (MO) has experienced a nearly 30% year-to-date increase, attributed to economic uncertainty, but recent RSI readings indicate overbought conditions, suggesting a potential pullback [12][14] - Generac Holdings Inc. (GNRC) reported strong earnings in Q2 2025, but current momentum is waning as the RSI indicates overbought conditions and investors appear to be cashing in gains [16][17][18]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Tobacco and Vapour Products - **Focus**: Monthly vapour volume export tracker using data from China Customs to monitor the vapour category's progress Core Insights and Arguments - **Growth Projections**: The UBS Tobacco Transformation Model estimates vapour retail sales growth of approximately +20% in 2024, reaching $46 billion, with equivalised volumes expected to grow by about +25%, constituting around 8% of total nicotine sales [1][2] - **Export Trends**: - Global vapour exports fell by -15.2% in July 2025 compared to -11.7% in June 2025, indicating a deceleration in exports to the US and a significant decline in exports to Asia, partially offset by growth in the UK [2] - US vapour exports decreased by -19.7% in July 2025, with a notable sequential improvement in July's export volumes being 2.7 times that of June [3] - Europe (excluding the UK) saw a decline of -12.9% in vapour exports in July 2025, while the UK experienced a growth of +3.8% [4] - Asia's vapour exports dropped by -30.3% in July 2025, reflecting slower adoption rates and a shift in production [5] Additional Important Insights - **Market Dynamics**: The decline in vapour exports is attributed to various factors, including increased customs inspections in the US, which may lead manufacturers to shift from air freight to sea freight [3] - **Illicit Market Impact**: Illicit disposable vapes account for nearly 20% of US nicotine volumes, and a reduction in this segment could benefit tobacco companies, especially given the rapid growth of disposable vapes in recent years [3] - **Regional Performance**: - Exports to Germany, France, and Spain showed growth despite the overall decline in Europe ex-UK [4] - The UK’s growth in exports could indicate inventory build-up, with export volumes increasing by +54.6% [4] Risks and Valuation Considerations - **Risks**: Potential risks to price targets include changes in consumer preferences, government regulations, macroeconomic trends, competitive intensity, and commodity cost fluctuations [37] - **Valuation Method**: A multiples-based approach is utilized for setting target prices, considering factors such as volume change, organic sales growth, and tobacco transformation [38] This summary encapsulates the key points from the conference call, highlighting the current state and future outlook of the global tobacco and vapour products industry, along with significant trends and risks.

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the **Global Tobacco** industry, specifically focusing on **vapour exports from China** as of July 2025. The data is sourced from China Customs and highlights trends in vapour product exports, which are primarily manufactured in China. Core Insights and Arguments 1. **Growth Projections for Vapour Sales**: The UBS Tobacco Transformation Model estimates vapour retail sales growth of approximately **20%** in 2024, reaching **$46 billion**, with equivalised volumes expected to grow by about **25%**, accounting for around **8%** of total nicotine sales [1][2][3]. 2. **Decline in Global Vapour Exports**: Global vapour exports fell by **15.2%** in July 2025 compared to **11.7%** in June 2025, indicating a deceleration in exports, particularly to the US and Asia, although there was some offset from the UK [2][4]. 3. **US Market Trends**: In the US, which represents about **40%** of global vapour retail sales, export volumes decreased by **19.7%** in July 2025, with a notable decline of **13.7%** in that month alone. This reflects a significant sequential improvement compared to previous months, suggesting manufacturers may be adapting to increased customs inspections [3][4]. 4. **European Market Performance**: Exports from Europe (excluding the UK) declined by **12.9%** in July 2025, while the UK saw a growth of **3.8%** in the same period, potentially due to inventory build-up [4][5]. 5. **Asian Market Challenges**: Vapour exports from Asia experienced a sharp decline of **30.3%** in July 2025, attributed to slower adoption rates and a shift in production to local markets [5][6]. Additional Important Insights 1. **Illicit Market Impact**: Illicit disposable vapes account for nearly **20%** of US nicotine volumes, and a reduction in this segment could benefit tobacco companies, especially given the rapid growth of disposable vapes in recent years [3][4]. 2. **Export Volume Trends**: The report indicates that vapour export volumes are being affected by various factors, including shifts in consumer preferences, regulatory changes, and competitive dynamics within the tobacco industry [2][3][4]. 3. **Valuation and Risk Considerations**: The report outlines risks to price targets, including changes in consumer preferences, government regulations, macroeconomic trends, and competitive intensity among tobacco companies [37][38]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the global tobacco industry, particularly in the vapour segment.

Group 1: Palantir Technologies - Palantir Technologies specializes in artificial intelligence (AI) software and has shown remarkable performance, with an average annual gain of 165% over the past three years and a 385% increase over the past year [3][4] - Despite its impressive returns, the company's valuation is considered high, making it a risky buy at the moment, although existing shareholders may consider holding or partially selling to lock in gains [4] - The company has significant ties to the U.S. military and has been favored by the Trump administration, which may influence its business operations [5] Group 2: DoorDash - DoorDash has averaged annual gains of 56% over the past three years and operates in approximately 30 countries [6][7] - The company reported a 20% year-over-year increase in total orders, reaching 761 million, and a 25% rise in revenue in its second-quarter earnings report [7] - Management highlighted improvements in consumer experience and delivery times, contributing to accelerated growth in monthly active users [7] Group 3: Nvidia - Nvidia has averaged annual gains of 71% over the past five years and 77% over the past decade, with a forward-looking price-to-earnings (P/E) ratio of 39, which aligns with its five-year average [8][9] - The company has expanded its focus beyond gaming chips to include AI and data center chips, capitalizing on the growing demand for AI technologies [9] Group 4: Altria Group - Altria has increased by approximately 37% over the past year and offers a dividend yield of 6.1%, with total annual payouts rising from $2.17 in 2015 to $4.08 recently [10][11] - The company is investing in smokeless products to offset declining smoking rates in the U.S., while successfully raising prices for its offerings [11] Group 5: Taiwan Semiconductor Manufacturing - Taiwan Semiconductor Manufacturing is the largest chip maker globally, holding a market share of 67.6%, and is unique for manufacturing chips rather than just designing them [11][12] - The company anticipates its AI accelerator revenue to double within the year, reflecting significant growth potential in the semiconductor industry [12]

Core Insights - The Schwab International Dividend Equity ETF (SCHY) is a passively managed fund aimed at tracking the Dow Jones International Dividend 100 Index, providing low-cost, income-oriented international exposure with a 3.72% dividend yield [2][3][10] Fund Overview - SCHY was launched on April 29, 2021, by Charles Schwab, with an expense ratio of 8 basis points and approximately $1.3 billion in assets under management (AUM) [3][15] - The fund has an average daily trading volume of 364,000 shares, indicating minimal spread risk for investors [3] - SCHY is fully invested in international equities, comprising 103 holdings, primarily mid- to large-cap stocks [7] Performance Metrics - Cumulative returns for SCHY show a year-to-date increase of 18.60% and a one-year return of 12.14% [4] - The fund's annualized return since inception is 5.57%, which is lower compared to peer strategies [4][15] Index and Stock Selection - SCHY is indexed to the Dow Jones International Dividend 100 Index, which includes mid- and large-cap international dividend-paying companies, excluding REITs [5] - The stock screening process involves evaluating fundamental qualities such as free cash flow, return on equity, indicated dividend yield, and 5-year dividend growth rate [5][14] Portfolio Composition - The top three country exposures in SCHY are the UK (15.36%), Australia (12%), and France (11.65%) [7] - The portfolio is heavily weighted towards financials (15%) and consumer staples (14.84%) [7] - The top 10 holdings account for 40% of the total portfolio weight, with British American Tobacco, Wesfarmers, and BHP Group being the largest positions [8] Distribution and Income Strategy - SCHY pays a quarterly distribution rate of $1.05 per share, yielding 3.72% on a trailing twelve-month basis, and has shown annual growth in distributions since inception [10][12] - The fund is suitable for passive income strategies and can be beneficial for tax-deferred accounts like IRAs or 401(k)s [12] Competitive Landscape - SCHY is noted as the lowest-cost strategy among its peers, with a significant AUM of $1.3 billion, although it has underperformed compared to other international dividend income strategies [15] - The Global X MSCI SuperDividend EAFE ETF (EFAS) is highlighted as a top-performing peer, despite its smaller AUM of $30 million [16]

Core Viewpoint - Emerging Growth Research released a quarterly update report on 22nd Century Group, indicating that the company missed expectations for Q2 2025 due to slower CMO stabilization and VLN® rollout timing, with EBITDA breakeven now projected for Q2 2026 [1][3]. Financial Performance - Q2 2025 revenue was $4.1 million, a decline of 49% year-over-year from $7.9 million in Q2 2024 and a 31% sequential decrease from $6.0 million in Q1 2025 [8]. - Gross loss remained stable at $(0.6) million compared to $(0.6) million in Q1 2025 [8]. - Operating loss increased to $(3.0) million from $(2.6) million in Q1 2025 due to higher VLN® promotional spending [8]. - EBITDA was $(2.8) million compared to $(2.5) million in Q1 2025 [8]. - Net debt was significantly reduced to $0.7 million from $3.3 million in Q4 2024 following a warrant exercise that generated $5.1 million in proceeds [4][8]. Strategic Focus and Growth Potential - The company is focusing on higher-margin operations and has significant long-term growth potential, with revenue growth expectations of +127% in 2026, +68% in 2027, and +39% in 2028 driven by VLN® market penetration in the $12 billion tobacco market [5][3]. - VLN® cigarettes are now shipping following state registrations, with management noting that only 223,000 cartons (5% of production capacity) are needed for breakeven profitability [4]. Management and Restructuring - New management has undertaken operational restructuring since 2023, divesting certain business lines to concentrate on contract manufacturing operations (CMO) and the VLN® product line [9]. - The company is positioned as a pure-play contract manufacturer for combustible tobacco products and the sole provider of VLN® reduced-nicotine cigarettes [9].

Core Insights - Altria Group, Inc. is relying on its pricing strategy to mitigate the decline in cigarette volumes, with a 10.2% drop in domestic cigarette shipment volume for Q2 2025 and an 11.9% decline for the first half of the year [1][7] - Despite the volume decline, the adjusted operating companies income (OCI) for the smokeable products segment increased by 4.2% in Q2 and 3.5% for the first half, attributed to strong net price realization of 10% for Q2 and 10.4% for the first half [2][7] - The company's pricing power reflects brand loyalty and a strategic focus on maximizing revenue per unit sold, which is crucial for maintaining financial health in a challenging market [3] Industry Comparison - Philip Morris International Inc. reported organic net revenue growth of 6.8% and organic adjusted operating income growth of 14.9% in Q2 2025, driven by higher combustible pricing and modest smoke-free gains [4] - Turning Point Brands, Inc. is shifting focus to high-growth product categories, with Modern Oral nicotine pouch revenues increasing nearly eightfold year over year, supported by significant investments in sales and marketing [5] Financial Performance - Altria's shares have increased by 13.3% over the past month, outperforming the industry's growth of 8.6% [6] - The company trades at a forward price-to-earnings ratio of 12.33X, lower than the industry average of 15.78X [8] - The Zacks Consensus Estimate for Altria's earnings per share has risen by 2 cents for both 2025 and 2026, now at $5.39 and $5.55 respectively [9]

Core Insights - Altria Group, Inc. (MO) reached a new 52-week high of $67.87, driven by strong earnings, growth in oral tobacco, and shareholder returns, prompting investor considerations on stock positions [1][8][10] Stock Performance - Over the past month, Altria's stock surged 14.9%, outperforming the Zacks Tobacco industry's growth of 1.4%, the Consumer Staples sector's 0.6%, and the S&P 500 index's 1.9% [2] - Technical indicators show Altria's stock trading at $67.58, above its 50-day and 200-day moving averages of $60.68 and $55.78, indicating strong upward momentum [6][7] Earnings and Revenue - In Q2 2025, Altria's adjusted EPS grew 8.3% year-over-year to $1.44, supported by pricing, efficiencies, and share repurchases, with revenues net of excise taxes steady at $5.29 billion [11][12] - Management raised the lower end of its 2025 adjusted EPS guidance to $5.35-$5.45, reflecting a growth rate of 3.0% to 5.0% [11] Segment Performance - The oral tobacco segment, particularly the on! nicotine pouch brand, saw a 26.5% shipment growth, contributing to a 10.9% increase in adjusted operating income and margin expansion of 310 basis points to 68.7% [12] - The smokeable products segment demonstrated resilience with a 4.2% rise in adjusted operating income and margin expansion of 290 basis points to 64.5%, with Marlboro's market share increasing to 59.5% [13] Market Challenges - Altria faces significant volume pressure in its core combustible segment, with domestic cigarette shipments declining by 10.2% in Q2 2025 due to industry decline and competition from flavored disposable e-vapor products [14] Valuation - Altria's forward 12-month P/E ratio is 12.31, below the one-year median of 10.52 and the industry average of 15.42, positioning it as a compelling value opportunity compared to peers [15] Earnings Estimates - The Zacks Consensus Estimate for Altria's earnings for the current and next fiscal year has risen to $5.39 and $5.55 per share, indicating year-over-year growth rates of 5.3% and 2.9% respectively [17]

Core Viewpoint - Philip Morris International reported strong second-quarter earnings for 2025, with adjusted earnings per share (EPS) beating estimates, while net sales fell short of expectations. The company raised its full-year EPS guidance, indicating positive growth prospects despite some challenges in revenue generation [2][11]. Financial Performance - Adjusted EPS for Q2 2025 was $1.91, reflecting a year-over-year increase of 20.1%, and beating the Zacks Consensus Estimate of $1.85 [2][3]. - Net revenues reached $10,140 million, a 7.1% increase on a reported basis and 6.8% on an organic basis, although it missed the consensus estimate of $10,255 million [3][4]. - The adjusted operating income rose 16.1% to $4,246 million, driven by improved pricing and volume/mix, despite increased costs in marketing and administration [5]. Segment Performance - Revenues from smoke-free products increased by 15.2%, accounting for 41% of total revenues, with strong performance from IQOS and ZYN products [5][7]. - In the European region, net revenues grew 8.7% to $4,234 million, while the Americas saw a 12.7% increase to $1,272 million, primarily driven by nicotine pouches [7][8]. Future Outlook - For 2025, adjusted EPS is projected to be in the range of $7.43-$7.56, indicating a growth of 13-15% compared to previous estimates [11]. - The company expects net revenues to increase by 6-8% on an organic basis, with operating income anticipated to rise by 11-12.5% [12]. - Philip Morris forecasts a decline of nearly 1% in total international industry volume for cigarettes and heated tobacco units in 2025, with a projected increase in smoke-free product volumes [12]. Cash and Debt Position - The company ended the quarter with cash and cash equivalents of $4,138 million and long-term debt of $42,431 million, alongside a total shareholder deficit of $10,012 million [10].