Broyhill Fund Quarterly Letter Highlights Key Position Changes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17 hours ago
0mins
Should l Buy PM?
Source: seekingalpha
- Profit-Taking Strategy: In its quarterly letter, Broyhill Fund reported booking gains on a portion of its investment in Philip Morris International (PM) and fully liquidating several positions, including Ball (BALL), demonstrating its agile investment strategy and responsiveness to market dynamics.
- New Investment Positions: The fund initiated several new positions during the quarter, including Microsoft (MSFT) and Smurfit WestRock (SW), particularly as Microsoft's valuation aligned with broader market levels, indicating confidence in future growth and a focus on value investing.
- Liquidation and Reinvestment: Broyhill Fund fully exited positions in Evolution (EVVTY) and Avantor (AVTR) to reinvest in higher conviction ideas, reflecting its ongoing pursuit of portfolio optimization and strategic repositioning.
- Market Expectation Adjustments: The fund began accumulating shares of Leggett & Platt (LEG) and fully exited when a bid from Somnigroup International (SGI) emerged, showcasing its keen ability to capitalize on market opportunities and pursue potential returns.
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Analyst Views on PM
Wall Street analysts forecast PM stock price to rise
11 Analyst Rating
8 Buy
3 Hold
0 Sell
Moderate Buy
Current: 189.610
Low
175.00
Averages
191.95
High
210.00
Current: 189.610
Low
175.00
Averages
191.95
High
210.00
About PM
Philip Morris International Inc. is an international tobacco company. The Company’s product portfolio primarily consists of cigarettes and smoke-free products. Its smoke-free business (SFB) also includes wellness and healthcare products, as well as consumer accessories, such as lighters and matches. The Company’s segments include Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region (SSEA, CIS & MEA); East Asia, Australia & PMI Global Travel Retail (EA, AU & PMI GTR), and Americas Region. The Company's brands include Marlboro, HEETS, IQOS, IQOS ILUMA, TEREA, VEEV and ZYN. Its IQOS smoke-free product brand portfolio includes heated tobacco and nicotine-containing vapor products. Its international cigarette brands are Chesterfield, L&M, and Philip Morris. It also owns a number of local cigarette brands, such as Dji Sam Soe and Sampoerna A in Indonesia, and Fortune and Jackpot in the Philippines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Broyhill Fund Quarterly Letter Highlights Key Position Changes
- Profit-Taking Strategy: In its quarterly letter, Broyhill Fund reported booking gains on a portion of its investment in Philip Morris International (PM) and fully liquidating several positions, including Ball (BALL), demonstrating its agile investment strategy and responsiveness to market dynamics.
- New Investment Positions: The fund initiated several new positions during the quarter, including Microsoft (MSFT) and Smurfit WestRock (SW), particularly as Microsoft's valuation aligned with broader market levels, indicating confidence in future growth and a focus on value investing.
- Liquidation and Reinvestment: Broyhill Fund fully exited positions in Evolution (EVVTY) and Avantor (AVTR) to reinvest in higher conviction ideas, reflecting its ongoing pursuit of portfolio optimization and strategic repositioning.
- Market Expectation Adjustments: The fund began accumulating shares of Leggett & Platt (LEG) and fully exited when a bid from Somnigroup International (SGI) emerged, showcasing its keen ability to capitalize on market opportunities and pursue potential returns.
See More
Challenges of High-Yield Investments in Consumer Goods for 2026
- Philip Morris International: In Q1 2026, Philip Morris International reported a 9.1% year-over-year increase in net revenue to $10.1 billion, with adjusted EPS growth of 16%, and raised its full-year EPS guidance to between $8.36 and $8.51, highlighting strong growth potential in alternative tobacco products despite regulatory risks.
- British American Tobacco: British American Tobacco's Velo Plus nicotine pouches lead the rapidly growing market, with a 3.4% EPS increase for full-year 2025 and a current dividend yield of 5%, while its healthy payout ratio of 69% indicates stability despite challenges from declining combustible product volumes.
- Hormel Foods: As a
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The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
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Consumer Staples Struggle, Coty Faces Challenges
- Consumer Stock Performance: Over the past six months, consumer staples stocks have declined by 2.3%, contrasting with the S&P 500's 10% rise, indicating a diminishing defensive investment characteristic in volatile markets.
- Coty's Financial Struggles: With a market cap of $2.01 billion, Coty has shown no organic revenue growth over the past two years, and demand is expected to decline in the next 12 months, leading to a 29.3% annual drop in earnings per share, highlighting severe profitability issues.
- Colgate-Palmolive's Strength: Colgate-Palmolive, valued at $69.97 billion, boasts a revenue base of $20.8 billion and a gross margin of 60.4%, demonstrating strong customer loyalty and market influence, making it a stock worth watching.
- Philip Morris's Robust Performance: With a market cap of $291.3 billion, Philip Morris showcases a highly efficient business model with a gross margin of 66.5% and an operating margin of 36.5%, indicating strong cash flow capabilities that attract investor interest.
See More
FDA Eases Enforcement on Unauthorized E-Cigarettes
- Enforcement Priority Shift: The FDA announced that it will not prioritize enforcement against certain unauthorized e-cigarettes and nicotine pouch products if companies have submitted marketing applications, which alleviates compliance pressure on businesses.
- Market Access Conditions: The FDA stated that manufacturers are unlikely to face enforcement action only if their marketing applications are accepted or supplemental filings have been pending for over 180 days, providing market access opportunities for companies like Philip Morris International.
- Scientific Data Requirements: Non-tobacco-flavored vape makers must provide sufficient scientific data to assess whether their products are 'appropriate for the protection of public health,' indicating the FDA's strong focus on youth usage concerns while offering clear compliance guidance for businesses.
- Resource Allocation Optimization: The FDA noted that by not prioritizing enforcement against these tobacco products, it can better allocate its enforcement resources, although it may still take action against products with elements appealing to underage users, which will impact the competitive landscape.
See More
Philip Morris Shares Slightly Decline After Six-Day Gain Streak
- Stock Pullback: Philip Morris (PM) shares experienced a slight decline of 0.1% on Friday after a six-day gain streak, closing at $171.01, indicating short-term market volatility.
- Year-to-Date Performance: So far this year, PM's stock has risen 7%, slightly underperforming the S&P 500's 8% increase, reflecting its relative performance in the broader market.
- Analyst Ratings: According to Seeking Alpha's Quant Rating, PM holds a strong buy rating of 4.6, although it received a C+ for growth factors, indicating solid profitability prospects but limited growth potential.
- Market Challenges: Analysts noted that PM's challenge moving forward is balancing production with the inventory normalization seen among U.S. retailers, which could impact its short-term performance and market confidence.
See More
Broyhill Fund Quarterly Letter Highlights Key Position Changes
- Profit-Taking Strategy: In its quarterly letter, Broyhill Fund reported booking gains on a portion of its investment in Philip Morris International (PM) and fully liquidating several positions, including Ball (BALL), demonstrating its agile investment strategy and responsiveness to market dynamics.
- New Investment Positions: The fund initiated several new positions during the quarter, including Microsoft (MSFT) and Smurfit WestRock (SW), particularly as Microsoft's valuation aligned with broader market levels, indicating confidence in future growth and a focus on value investing.
- Liquidation and Reinvestment: Broyhill Fund fully exited positions in Evolution (EVVTY) and Avantor (AVTR) to reinvest in higher conviction ideas, reflecting its ongoing pursuit of portfolio optimization and strategic repositioning.
- Market Expectation Adjustments: The fund began accumulating shares of Leggett & Platt (LEG) and fully exited when a bid from Somnigroup International (SGI) emerged, showcasing its keen ability to capitalize on market opportunities and pursue potential returns.
See More
Challenges of High-Yield Investments in Consumer Goods for 2026
- Philip Morris International: In Q1 2026, Philip Morris International reported a 9.1% year-over-year increase in net revenue to $10.1 billion, with adjusted EPS growth of 16%, and raised its full-year EPS guidance to between $8.36 and $8.51, highlighting strong growth potential in alternative tobacco products despite regulatory risks.
- British American Tobacco: British American Tobacco's Velo Plus nicotine pouches lead the rapidly growing market, with a 3.4% EPS increase for full-year 2025 and a current dividend yield of 5%, while its healthy payout ratio of 69% indicates stability despite challenges from declining combustible product volumes.
- Hormel Foods: As a
See More
The Potential and Challenges of Coal's Revival
- Surging Market Demand: Babcock & Wilcox (B & W) currently holds a $2.7 billion backlog, with $2.4 billion stemming from its partnership with Applied Digital, indicating a robust growth in power demand driven by the data center boom, which may lead to a revival of coal.
- Significant Stock Performance: B & W's stock has surged 244% over the past year, rising from below $1 to $21, reflecting optimistic market expectations for its future growth potential, despite facing controversies related to Applied Digital.
- Policy Support for Coal: President Trump and the Energy Secretary are actively working to prevent the closure of coal plants, viewing coal as a vital national security resource, which could provide new business opportunities for companies like B & W, despite ongoing environmental concerns.
- Changing Competitive Landscape: B & W possesses unique capabilities in building natural gas power plants, and with GE Vernova currently at capacity, B & W's expansion potential may position it favorably in the future energy market, particularly in the combined use of coal and natural gas.
See More
Consumer Staples Struggle, Coty Faces Challenges
- Consumer Stock Performance: Over the past six months, consumer staples stocks have declined by 2.3%, contrasting with the S&P 500's 10% rise, indicating a diminishing defensive investment characteristic in volatile markets.
- Coty's Financial Struggles: With a market cap of $2.01 billion, Coty has shown no organic revenue growth over the past two years, and demand is expected to decline in the next 12 months, leading to a 29.3% annual drop in earnings per share, highlighting severe profitability issues.
- Colgate-Palmolive's Strength: Colgate-Palmolive, valued at $69.97 billion, boasts a revenue base of $20.8 billion and a gross margin of 60.4%, demonstrating strong customer loyalty and market influence, making it a stock worth watching.
- Philip Morris's Robust Performance: With a market cap of $291.3 billion, Philip Morris showcases a highly efficient business model with a gross margin of 66.5% and an operating margin of 36.5%, indicating strong cash flow capabilities that attract investor interest.
See More
FDA Eases Enforcement on Unauthorized E-Cigarettes
- Enforcement Priority Shift: The FDA announced that it will not prioritize enforcement against certain unauthorized e-cigarettes and nicotine pouch products if companies have submitted marketing applications, which alleviates compliance pressure on businesses.
- Market Access Conditions: The FDA stated that manufacturers are unlikely to face enforcement action only if their marketing applications are accepted or supplemental filings have been pending for over 180 days, providing market access opportunities for companies like Philip Morris International.
- Scientific Data Requirements: Non-tobacco-flavored vape makers must provide sufficient scientific data to assess whether their products are 'appropriate for the protection of public health,' indicating the FDA's strong focus on youth usage concerns while offering clear compliance guidance for businesses.
- Resource Allocation Optimization: The FDA noted that by not prioritizing enforcement against these tobacco products, it can better allocate its enforcement resources, although it may still take action against products with elements appealing to underage users, which will impact the competitive landscape.
See More
Philip Morris Shares Slightly Decline After Six-Day Gain Streak
- Stock Pullback: Philip Morris (PM) shares experienced a slight decline of 0.1% on Friday after a six-day gain streak, closing at $171.01, indicating short-term market volatility.
- Year-to-Date Performance: So far this year, PM's stock has risen 7%, slightly underperforming the S&P 500's 8% increase, reflecting its relative performance in the broader market.
- Analyst Ratings: According to Seeking Alpha's Quant Rating, PM holds a strong buy rating of 4.6, although it received a C+ for growth factors, indicating solid profitability prospects but limited growth potential.
- Market Challenges: Analysts noted that PM's challenge moving forward is balancing production with the inventory normalization seen among U.S. retailers, which could impact its short-term performance and market confidence.
See More
