Imperial Brands shares have rebounded. Here’s why I think they can keep rising

first_img Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. The share price of Imperial Brands (LSE: IMB) has been trending down for what seems like an eternity. Since rising above 4,000p in mid-August 2016, shares in the tobacco manufacturer have just gone down…and down…and down.Yet recently, the FTSE 100 stock has shown signs of a recovery. Since I covered IMB on 13 December, it has risen more than 10%. Can the shares keep rising? I believe so. Here are three reasons why.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Shift towards valueValue stocks such as Imperial Brands have been out of favour for a long time now. However, just recently, there have been signs that value could be making a comeback.For example, in the final quarter of 2019, the S&P 500 value index outperformed the S&P 500 growth index by more than 1.5 percentage points (9.93% vs 8.32%). With many growth stocks now trading at lofty valuations, I wouldn’t be surprised to see this shift towards value continue. “Ignore value at your peril,” says John Linehan, chief investment officer of equities at T Rowe Price Group.Given that Imperial Brands currently trades on a forward-looking P/E ratio of an incredibly low 7.2 (less than half the FTSE 100 median of 15.6), I think it could benefit if investors continue to focus on value.Sentiment towards tobaccoWhile the tobacco sector remains out of favour for a number of reasons, I have seen a small improvement in sentiment recently. For example, just yesterday, analysts at JP Morgan said that they see further upside for big tobacco due to the “sustainability of earnings and cash.” They lifted their price target for Imperial Brands to 2,100p from 1,900p – an increase of 10.5%.Similarly, after the US Food and Drug Administration recently exempted menthol and tobacco from a list of popular e-cigarette flavours that it banned under its new guidelines, analysts at Jefferies said: “We are actually bullish on implications of this final guidance.” So not everyone hates the tobacco sector at the moment. Insiders are still buyingFinally, it’s also worth pointing out that insiders continue to buy here. In November, I noted that Imperial’s group innovation and science director David Newns had spent £1.4m on the stock, following purchases from outgoing CEO Alison Cooper, CFO Oliver Tant, and chairman Mark Williamson in September.Since then, a number of other top directors have loaded up on the shares, including strategy director Amal Pramanik (10,000 shares) and senior independent non-executive director Sue Clark (5,000) shares. When company insiders are spending a large amount of their own money on stock, it’s generally a good sign.RisksOf course, I won’t deny that there are plenty of risks to the investment case here. Sustainability is likely to become more of a focus for investors in the years ahead and regulatory pressure is also likely to remain intense.However, when you consider the stock’s absurdly low valuation and its huge dividend yield, and the fact that the company remains cash generative and highly profitable, the risk/reward proposition looks favourable, in my view. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Image source: Getty Images. Imperial Brands shares have rebounded. Here’s why I think they can keep risingcenter_img Our 6 ‘Best Buys Now’ Shares Simply click below to discover how you can take advantage of this. Edward Sheldon owns shares in Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Edward Sheldon, CFA | Thursday, 23rd January, 2020 | More on: IMB I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. 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