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Hi guys sorry to interupt your options talk, but does anyboby else think <MO> is cheap? I'm tying to value it now which is always the hardest part for me. As Buffett said, the only two thinks that matter are price and value. Price is quoted everyday in the paper but value is what we have to calculate.

Using Value Line, I have come up with a quick and dirty valuation of $84/share using next year's(1999) est. free cash flow ($3.35) divided by .04 (k-g). It looks cheap compared to its price around $39)but this valuation does not include the tobacco litigation
liability which could be a huge number.

Anyway it could be a 50 cents on the dollar type of investment that value guys love. Assuming it goes to 100 cents on the dollar in five years, the average annual return would be over 20% (100%return/5) which isn't bad compared to the long-term return of the market (10%-12%).

Any thoughts on alternative methods to value <MO> ?


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