Altria, the largest tobacco company in the US, reported a 20 per cent increase in net earnings on Wednesday as growth in its smokeless products continued to take off while higher Marlboro cigarette prices also padded profits.
Net income rose to $1.99bn, or $1.03 per share, compared to $1.65bn, or 84 cents per share in the period the prior year. Revenue also increased 2.2 per cent to $6.7bn. Both metrics were ahead of analyst expectations of 87 cents per share and sales of $5.02bn.
Altria said its MarkTen e-vapor product was now the number two brand nationally, representing 13 per cent of the retail market share. It also reiterated plans to sell Philip Morris International’s modified-risk tobacco product IQOS, pending FDA approval. The results came one day after rival Reynolds American was formally folded into British American Tobacco to create the world’s largest listed tobacco company by sales. While shares in Altria have gained 6.5 per cent in the year, BAT, in contrast, has gained 15 per cent.
Analysts have warned Altria has not embraced e-cigarettes and other alternative smoking products to the same extent as some of its peers. However efforts to expand operating margins, including the consolidations some of its manufacturing facilities, has kept the company afloat, even after a voluntary product recall last quarter of certain smokeless tobacco products. The company also reaffirmed its 2017 full-year guidance. It continues to expect earnings per share to be in the range of $3.26 to $3.32.
Overall, the bias in prices is: Sideways.
Short term: Prices are stalling.
Intermediate term: Prices are ranging.
The projected upper bound is: 75.85.
The projected lower bound is: 72.19.
The projected closing price is: 74.02.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend (which appears to be the case with ALTRIA GROUP). It then signifies that the momentum may be shifting from the bears to the bulls.
If the engulfing bullish pattern occurs during an uptrend, it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 42.8551. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 50.98. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -44. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 23 period(s) ago.
Rex Takasugi – TD Profile
ALTRIA GROUP closed up 2.230 at 73.960. Volume was 46% above average (neutral) and Bollinger Bands were 33% narrower than normal.
Open High Low Close Volume
71.200 73.977 71.200 73.960 2,668,777
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 73.18 74.41 70.53
Volatility: 21 16 16
Volume: 1,804,193 1,842,408 1,860,290
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
ALTRIA GROUP is currently 4.9% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of MO.N (mildly bearish). Our trend forecasting oscillators are currently bearish on MO.N and have had this outlook for the last 17 periods.
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