• Brett Schafer

British American Tobacco:: The Past, Present, and Future of the Nicotine Industry With Devin LaSarre



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Show Notes



This week we brought on Devin LaSarre, author of the Invariant Substack, to discuss the nicotine industry and British American Tobacco. Here are some questions we asked him:


  1. Intro: How did you end up covering the tobacco/nicotine industry? What interests you about it?

  2. You’ve thoroughly researched the history of the nicotine industry. What has led the industry to where it is today? What is on the horizon for the future?

  3. What is British American Tobacco? History, overview of segments, etc.

  4. Combustibles: How are they managing volume declines? What prospects does this segment have?

  5. Non-combustibles: Why have consumers of BTI’s products started growing the past few years?

  6. More promising segment in your opinion: Vaping or nicotine pouches? Why?

  7. What are your thoughts on the company’s capital allocation strategy and paying out so much of profits as dividends?

  8. Would you rather see more money allocated to buybacks?

  9. How are you valuing the stock today? Why do you expect forward double-digit returns for shareholders?

  10. Pre-mortem: Why would an investment in BTI do poorly over the next decade?


Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.

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