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This FTSE 100 share was down 10% yesterday. Here’s what I’m doing now

first_img Michael Taylor does not hold a position 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. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Michael Taylor Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” This FTSE 100 share was down 10% yesterday. Here’s what I’m doing now Enter Your Email Address Imperial Brands (LSE: IMB) is a FTSE 100 fast-moving consumer goods company (FMCG). It offers a range of cigarettes, tobacco, cigars, and has moved into the new vaping sector. The company is a global operator, and one of the Big Two smoking companies alongside British American Tobacco. The company released its AGM statement this morning, announcing that tobacco trading was in line with expectations, with a weighting (as previously guided) to the second half of the year.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…But what has sent the price tumbling is weaker-than-expected consumer demand for vapour. This is in part due to the US FDA’s ban of certain flavours of cartride-based vapour devices, which has hurt sales.Is vaping the new smoking?Many are calling vaping the new smoking, in reality, the jury is still out on the health effects of this activity. In the last century, smoking was promoted as healthy and even encouraged by tobacco companies. In the 21st century, tobacco companies are struggling as a result of regulatory changes.Bans on smoking in public places, required warnings on cigarette packets, and an increasingly aware demographic group focused on the environment and health have all been headwinds for the tobacco companies. It was hoped that vaping would be the natural transition from smoking, but regulators are not giving the tobacco companies an easy ride. Declining fundamental strengthIn the last results for Imperial, profit declined to £1,155m from 1,745m. This is a big drop, however, the company is still generating £3,708m in operating cash flow before movements in working capital, compared to £3,505m in the prior period.The company isn’t in trouble yet, but with such headwinds against it, Imperial needs to adapt. Total tobacco volume declined 4.4% but the net revenue from these products increased 2.7%. While the amount of smokers may be dropping in terms of the percentage of people who smoke, more people are being born and becoming life-long customers of Imperial Brands. However, the company’s focus is on transitioning smokers to next generation products (NGP) – net revenue in this sector grew 52.4%. NGPThe company wants smokers to choose its products with lower health risks by providing high-quality NGPs.  Vapour products, under the company’s brand blu, are different to all other tobacco-based products as they do not contain tobacco leaf. Blu has established itself in both the UK and the US, and is making inroads across Europe too. In my opinion, buying Imperial Brands stock is a bet on these NGPs being a success. Given the regulatory issues appearing globally, I think there are plenty of other, better opportunities both for growth and income investing. So Imperial Brands stock can drop as much as it wants – unless I see a serious shift in sentiment for vaping, I would not consider buying any shares. center_img 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. 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. Image source: Getty Images 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. Our 6 ‘Best Buys Now’ Shares Michael Taylor | Thursday, 6th February, 2020 | More on: IMB last_img read more