Should You Now Consider Selling Your Philip Morris (PM) Position?

Distillate Capital, an investment management firm, released its fourth quarter 2022 investor letter, a copy of the same can be downloaded here. At the end of the fourth quarter, Distillate’s U.S. FSV strategy declined 10.58% on a total return basis net of fees compared to a decline of 18.11% for the S&P 500 benchmark. Better relative performance for Distillate’s SMID QV strategy continued into 2022 with a decline of 8.64% on a total return net-of-fee basis, significantly ahead of a comparable decline of 20.49% for the Russell 2000 ETF and -14.67% for the Russell 2000 Value ETF. On the other hand, Distillate’s Intl. FSV strategy again lagged its MSCI ACWI Ex-US benchmark in 2022, while the Distillate’s U.S. FSV strategy’s free cash flow to market cap yield valuation of 7.2% compares very favorably to 5.1% for the same measure for the S&P 500. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

In its Q3 2022 investor letter, Distillate Capital mentioned Philip Morris International Inc. (NYSE:PM) and explained its insights for the company. Founded in 1847, Philip Morris International Inc. (NYSE:PM) is a New York, New York-based multinational tobacco company with a $157.0 billion market capitalization. Philip Morris International Inc. (NYSE:PM) delivered a 0.09% return since the beginning of the year, while its 12-month returns are down by -0.82%. The stock closed at $101.30 per share on January 24, 2023.

Here is what Distillate Capital has to say about Philip Morris International Inc. (NYSE:PM) in its Q3 2022 investor letter:

“It makes intuitive sense that our process that employs bottom-up stock selection based on the combination of valuation and quality would reduce the weight in places that outperformed and add to areas that were weaker. The largest exited positions in the quarter were Philip Morris International Inc. (NYSE:PM), which saw its stability score fall slightly below the threshold for inclusion.”

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Our calculations show that Philip Morris International Inc. (NYSE:PM) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Philip Morris International Inc. (NYSE:PM) was in 63 hedge fund portfolios at the end of the second quarter of 2022, compared to 56 funds in the previous quarter. Philip Morris International Inc. (NYSE:PM) delivered a 14.46% return in the past 3 months.

In January 2023, we also shared another hedge fund’s views on Philip Morris International Inc. (NYSE:PM) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q4 2022 page.

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Disclosure: None. This article is originally published at Insider Monkey.