RE: Superb BUY on Improving FundamentalsOne key aspect of JTI is the fact that it is 48 % owned by Mcvicar Industries ( V.MCV ) which is a superb buy in its own rights , on its strong balance sheet and earnings profile.
MCV is a holding company which acquires companies and then manages them to extract synergistic values.
JTI only has 21.5 m shares , so MCV would only have to acquire the 11 million shares that it does not already own.
Even at book value of
.78/share , it would only pay $8.5 million and get a large chunk of that back as hard cash.
Even at a TO of 20 % premium to book value ( about $1 per share ) , MCV would pay less than $6 million , when JTI's cash reserves are considered.
Such a move by McVicar is not unlikley , as it can then fully account for JTI's superb earnings profile into its own earnings profile ( it cannot do so with less than 50 % equity ).