So... What are you thoughts on this one (BTI)?

[SimonPB]

why hedge ?? my thinking is that that only makes brokers rich ..

[Werner_1]

I do plan on acquiring some shares over time, to not too concerned about the exact price, obviously it would be better at lower prices, but lets see what happens. I've never hedged a share before. let me konw how it goes if you test it out.

[#3]

Well, I think that BTI will come off this year - my thoughts are similar to OST's technical alert published on the matter. So, since I am bearish on BTI, I have the following view. Results are due end of Feb. At the low end of the forecasts, it will take an 18 times PE to sustain the current price of the stock - that is a tall order if BTI's results dissapoint, so I would expect a pullback to a more sustainable 14 or 15 times PE - which in turn, would pull the stock back by 20%-25% (assuming lower end of forecast). That would put me in the money with my hedge - I would close out the position, and probably exit BTI as well, as it would no longer constitute a growth stock, IMO. If results are in the upper end of the forecast, well I will exit my hedge take the 5 or 6% loss on the chin, and consider my risk greatly reduced since BTI would continue to be a growth stock.

[sponono]

technical view: the share price did a sell divergence at the all time high of R398. the general market trend is up. stocks that do sell divergences on average fall by 20% over a two months period before finding the bottom. share price to watch is R318 sometime in March 2012. THIS IS OF COURSE PROBABLE AND NOT GUARANTEED.

[prancing_horse]

After SOL my largest holding is BTI in my long term portfolio and at this stage a hold for a number of reasons.Having bought in May 2010 with the most expensive at 233 including costs, selling now SARS would take 40% of my gains. Then related to the current price the dividend income stream is still acceptable. With our inflation rate always going to increase at a far faster rate than most of our major trading partners, I think it's an excellent rand hedge stock.I wouldn't be buying now but should it shed 10% plus on rand strength, then maybe.

[Blik]

I bought BTI principally as a dividend play - so, so long as they continue to pay a decent dividend and so long as the rand pound exchange rate stays reasonably constant I am happy to stay in. I am not too worried at this stage about a drop in share price, because I suspect that if the share prices drops it will probably rise again, well before they ban smoking which will give me time to exit if needs.

[#7]

Ja prancing horse, that is another reason for hedging a stock. Since I wouldn't want to incurr the wrath of SARS on my entire gain since 2008, I am thinking of hedging over the short term, to protect against further downside. I don't mind paying tax on hedge profits, and can exit in 2012, when i would have had the share for 5 years, (although I think 3 is sufficient for SARS?)

[Wino]

Or maybe one could consider Reinet. 80% of assets is BTI, trading at a discount of +/- 18% to NAV, diversifying into other investments etc. Does not pay div's but one could consider it as a low risk pension fund i.a.w buy regularly and put away. Add to that one also has Rupert at the helm, well connected, conservative and a top businessman.

[Wino]

Or maybe one could consider Reinet. 80% of assets is BTI, trading at a discount of +/- 18% to NAV, diversifying into other investments etc. Does not pay div's but one could consider it as a low risk pension fund i.a.w buy regularly and put away. Add to that one also has Rupert at the helm, well connected, conservative and a top businessman.

[SimonPB]

all you get with REI is massive management fees for not sellig BTI .. no thanks ..

[Wino]

True, but more or less in line with most fund managers don't you think?

[SimonPB]

not sure, BUT the REI directors are doing nothing for their fee .. that's different ..

[SimonPB]

you can't even ask questions of the board "As Reinet Depository Receipt (`DR') holders, your votes at shareholder meetings are exercised on your behalf by Reinet Securities SA and as such you will not be able to attend the meeting in person."

[Roasty]

So what is wrong with staying below the radar with REI?