Mon, Mar. 23, 8:09 AM
- Cash is still king in the tobacco industry.
- Despite a wave of worry over global plain-packaging laws on cigarettes, shares of tobacco companies continue to offer solid returns for shareholders due in part to vibrant free cash flow.
- Pricing has also held up in the sector even with volume in decline.
- In some regions taxes as a percentage of price has decreased which is a boost to profit margins in the sector.
- Another factor in the industry is the "massive" barriers erected by regulators that have ended up to act a wide moat for some global companies.
- Tobacco stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, BTI, OTCPK:BTAFF, OTC:BATMF, OTCPK:JAPAF, OTCPK:JAPAY.
Thu, Mar. 12, 2:30 AM
- The U.K. Parliament has voted to ban branding on cigarette packs as of 2016, under which cigarettes would be sold in uniform packs stripped of distinctive logos and colors, and adorned with graphic health warnings.
- The move draws promises of legal challenge from the tobacco industry and raises the prospect of similar legislation in countries across Europe.
- Previously: England to vote on cigarette pack branding ban (Mar. 11 2015)
- Related stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, OTCPK:JAPAY, BTI
Apr. 29, 2014, 12:55 PM
- Bankers and lawyers are busy working on potential mergers in the tobacco industry, reports CNBC (video).
- The biggest buzz is over the potential that Reynolds American (RAI +1.4%) will buy Lorillard (LO +3%) for as much as $80 per share.
- Though Wells Fargo notes Reynolds would have to divest some significant menthol brands to get a Lorillard deal past regulators, the firm sees a deal as likely.
- Other tobaccco players: MO, PM, BTI, ITYBY, ITYBF, PHJMF, JAPAF, SFIO, VGR, SWNG, SWMAF, SWMAY, XXII, BTAFF, UVV
Mar. 6, 2014, 10:24 AM
- Analysts thinks there could be a wave of consolidation in the tobacco industry as the slow growth rates seen in the industry appear to be here to stay.
- The story of the week has been Lorillard (LO -1.7%) which is reportedly a target of Reynolds American (RAI -2.8%), but other linkups are expected.
- The rapid emergence of e-cigarettes will play a factor in the M&A activity. The stance of various regulators will be critical in determining where companies place their bets.
- Related stocks: MO, PM, BTI, ITYBY, ITYBF, PHJMF, JAPAF, SFIO, VGR, SWNG, SWMAF, SWMAY.
Dec. 18, 2013, 4:45 AM
- The compromise text includes the following key measures to be brought into national law by member states:
- No selling of flavored tobacco (including fruit, menthol, vanilla)
- Combined picture and text health warnings that cover 65% of the front and back of packages of smoking products
- Member states may decide to ban cross-border distance sales of tobacco products
- Tobacco stocks: MO, LO, PM, RAI, XXII, AOI, AHII, BTI, BTAFF, GGNPF, PHJMF, ITYBY, ITYBF, JAPAF, SFIO, SWNG, SWMAF, SWMAY, UVV, VGR
- Source: EU Council
Mar. 20, 2013, 5:31 AMThe Justice Department won't go to the Supreme Court to try to overturn a ruling that voided regulations requiring the placement of graphic health-warning pictures on cigarette packs. A lower appeals court agreed with tobacco firms such as R.J. Reynolds (RAI) and Lorillard (LO) that the regulations would have violated their First Amendment rights to free speech. The FDA will now formulate new rules that address the court's concerns. | Comment!
Jun. 18, 2012, 8:01 AMNomura (NMR) is excluded from getting a piece of the Japanese government's sale of $6B worth of Japan Tobacco shares. The dominant underwriter in Japan is thought to be being punished for its part in an insider trading operation. Will the bank be similarly excluded from the upcoming Japan Airlines IPO? | Comment!
Mar. 1, 2012, 6:36 AMA federal judge yesterday confirmed a preliminary injunction blocking the FDA from forcing tobacco companies to put gruesome health warnings on cigarette packaging, including a corpse and cancerous lungs. "These mandatory graphic images violate the First Amendment by unconstitutionally compelling speech," the judge explained. | 12 Comments
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