John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Tobacco Supplier Alliance One International Is About To Turn Over A New Leaf

Company overview

Alliance One International (NYSE:AOI) is an independent leaf tobacco merchant (e.g. selection, purchasing, processing, packaging, storage and shipping) serving cigarette manufacturers. AOI was formed in 2005 by the merger of the second and third largest tobacco merchants, DIMON Inc. and Standard Commercial.

Market duopoly + improving macro/micro picture

As half of the market duopoly (shared with its primary competitor Universal Corp.), AOI is one of the best positioned companies to weather (pun intended) the inevitable volatile operating conditions and capture more of the upside during bullish cycles and less of the downside during bearish ones. For example, its global presence (e.g. >35 processing facilities serving customers in ~90 countries), large network of experienced buyers, broad product...

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