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Tobacco stocks looks ripe for more gains, thinks money manager L.A. Little. It's a case of more...

Tobacco stocks looks ripe for more gains, thinks money manager L.A. Little. It's a case of more of the same in the sector as the cash-rich companies continue to pump out healthy dividends to attract yield-hungry funds. The usual suspects (MO, PM, BTI, RAI, LO) in the sector look to be steady performers while sleepers include Vector Group (VGR) and Universal Corporation (UVV).
Comments (7)
  • berloe
    , contributor
    Comments (1575) | Send Message
     
    I like LO but afraid of the dependence on menthol and the growing calls against its use in tobacco.
    RAI has a POR of 87% vs "only" 81% for MO.
    No positions currently.
    1 May 2013, 08:08 AM Reply Like
  • MexCom
    , contributor
    Comments (3050) | Send Message
     
    Out of the group VGR has the least tobacco and could outperform on total returns based on their real estate holdings where the REITs are going gang busters right now. I'd stay away from UVV because of their dependence on international supplies and dependency on contracts with cigarette companies where many are going toward direct purchase from growers, coops and government controlled parastateal controlled marketing. They've been burnt previously on some kick-back payment deals by the FTC.
    1 May 2013, 08:18 AM Reply Like
  • doc47
    , contributor
    Comments (992) | Send Message
     
    Long PM and MO but with June covered calls now in the money due to be exercised in the next month barring a "correction." I'll just buy the stocks again if I can't close out the options on the inevitable dip. It has worked 3 times for each company with gains every time. LO looks interesting., too.
    1 May 2013, 08:30 AM Reply Like
  • Sunshine123
    , contributor
    Comments (609) | Send Message
     
    I am long on MO, PM and RAI. They continue to be good holdings.
    1 May 2013, 10:00 AM Reply Like
  • Strate
    , contributor
    Comments (3) | Send Message
     
    I am long MO and have been since 2002. I have bought MO in my DRIPS account and allowed all dividends to be reinvested. I have never sold any shares from my DRIPS account. I am very pleased and will continue....
    1 May 2013, 01:29 PM Reply Like
  • rphnmc1
    , contributor
    Comments (2) | Send Message
     
    Been long LO when it was still CG and MO plus PM since the 1998 settlement signing. Best thing to ever happen to them. Now all the state governments and Feds have huge financial interest in them doing well, especially since most of the states have sold bonds against their future settlement payments.
    3 May 2013, 04:20 PM Reply Like
  • Sunshine123
    , contributor
    Comments (609) | Send Message
     
    To rphnmc1 - Many thanks for your insight into these tobacco companies.
    4 May 2013, 09:30 AM Reply Like
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