Tue, Mar. 17, 10:25 AM
- Cowen Research notes the increase in the 10-year Treasury yield has been a factor with U.S. tobacco stocks.
- Low interest rates have been an ongoing positive factor for the dividend-lush tobacco sector.
- On watch: Reynolds American (RAI -0.9%), Lorillard (LO -0.5%), Altrai (MO -0.7%), Vector Group (VGR +0.6%).
Fri, Mar. 13, 5:55 PM
- Antitrust enforcers are asking detailed questions about business plans and leadership of a third company that plays a key role in Reynolds American’s (NYSE:RAI) proposed acquisition of Lorillard (NYSE:LO), WSJ reports.
- RAI and LO have sought to head off antitrust concerns by selling $7.1B in cigarette brands and other assets to U.K.-based Imperial Tobacco (OTCQX:ITYBY, OTCPK:ITYBF); the intent was to give Imperial a significant U.S. presence that could replace market competition previously provided by LO.
- The FTC’s review of the merger, now in its latter stages, is said to be examining whether Imperial can become a significant player in the U.S. market if the merger is approved.
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
Wed, Mar. 11, 5:41 AM
- Lawmakers in the lower house of Britain's parliament are expected to vote to ban branding on cigarette packs by a large margin later today, in a move that would force tobacco firms to adopt plain packets in England by 2016.
- The measure, which was passed in Australia two years ago, has manufacturers' worried, as it will likely crimp profits and may spread to additional countries.
- The tobacco industry has fiercely resisted the new law, arguing that the plain packs infringe on intellectual property rights.
- Previously: England looks to ban branding on cigarette packs (Jan. 22 2015)
- Related stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, BTI
Tue, Mar. 10, 1:08 PM
- Regulatory review on the pending merger between Reynolds American (NYSE:RAI) Lorillard (NYSE:LO) will hinge on the Newport menthol brand, according to analysis.
- A survey of retailers by Wells Fargo showed a strong sense that Newport will be approved to be part of the Reynolds Every Day Low Price program which could help sales grow.
- Reynolds could also flex its muscles with retailers if Newport is part of the program.
- The addition of Newport to EDLP could squeeze out some newly-added Imperial Tobacco (OTCQX:ITYBY, OTCPK:ITYBF) brands such as Kool, Salem, Winston, and Maverick.
Thu, Feb. 26, 8:14 AM| Thu, Feb. 26, 8:14 AM | Comment!
Wed, Feb. 25, 5:45 PM
- The three largest U.S. tobacco companies - Altria (NYSE:MO), Reynolds American (NYSE:RAI) and Lorillard (NYSE:LO) - agree to pay a combined $100M to settle hundreds of pending federal lawsuits in Florida, resolving some but not all of the legal uncertainty that has hung over the industry since a class-action lawsuit was brought by state residents in 1994.
- The settlement is far less than the $500M-plus the industry has had to pay winning plaintiffs in Florida over the past decade, but it leaves unresolved more than 3,000 cases pending in state courts, cases that are bigger and more potentially damaging.
- MO and RAI each will pay $42.5M to resolve ~400 federal cases, and LO will pay $15M.
Wed, Feb. 25, 9:56 AM| Wed, Feb. 25, 9:56 AM | Comment!
Thu, Feb. 19, 3:16 PM
Wed, Feb. 11, 7:59 AM
- Lorillard (NYSE:LO) reports wholesale cigarette volume decreased 0.9% in Q4.
- Higher pricing help offset the volume slip.
- Gross profit rate fell 320 bps Y/Y to 38.1%.
- Electronic cigarette revenue -27.8% to $39M off of a tough compare which included promotions for a brand introduction.
- The company expects to close its merger with Reynolds American in the first half of the year.
Wed, Feb. 11, 7:04 AM
Tue, Feb. 10, 5:30 PM
Wed, Jan. 28, 9:44 AM
- Shareholders with Reynolds American (RAI +1.5%) have approved an issuance of shares in connection with the company's acquisition of Lorillard (LO +0.8%).
- The merger is still subject to regulatory approval.
- The company expects a closing in the first half of 2015.
- Reynolds American merger update (.pdf)
Mon, Jan. 26, 2:26 AM
- Reynolds (NYSE:RAI) Chief Executive Susan Cameron is confident shareholders will approve the Reynolds American and Lorillard (NYSE:LO) deal this Wednesday, which will combines the two to create a more formidable rival against Marlboro (NYSE:MO).
- Shareholders of Imperial Tobacco (OTCQX:ITYBY) (the third party which is expected to buy several brands of Reynolds American as part of the deal) are also expected to approve the transaction because it turns Imperial into the No. 3 player in the U.S.
- However, the real test for the merger and the related divestiture of brands will come later this quarter, when the FTC weighs in on deal.
- Previously: The FTC asks Reynolds American and Lorillard for more info on merger (Aug. 29 2014)
Sat, Jan. 24, 8:25 AM
- In a low-yield world, the newly launched iBillionaire High Dividend Index - which tracks the trading moves of 25 investing-savvy billionaire investors such as Stanley Druckenmiller, James Dinan and Nelson Peltz - actually lives up to its name with a dividend yield of 5.34%.
- At 24%, the index has a high allocation of energy shares, including OXY, TRP, CNP, COP, BP, ATLS, CVI, WMB, APL, RIG and ARP.
- Also worth noting is that the index contains some high-yielding mortgage REITs, an area most investors hate right now but where billionaires seem to find value; examples are NRF, AGNC and CIM.
- No mutual fund or ETF tracks this index, but it offers a fishing pond of income investment ideas to research further.
- The top 20 holdings: TLM, CVC, GM, TIME, AEE, D, STAY, KMI, TROX, EXC, STNG, PPL, IRM, PFE, KKR, KAR, F, MIC, LO, ABBV.
Thu, Jan. 22, 4:08 AM
- Following in the footsteps of Australia, which two years ago enacted a law forcing cigarettes to be sold in plain olive green packaging, the British government will try to pass a law before May forcing tobacco firms to sell cigarettes in plain packs.
- Around 3.4% fewer cigarettes were sold in Australia in 2013, compared with 2012.
- The tobacco industry has fiercely resisted the new law, arguing that plain packs infringe on the intellectual property rights covering brands.
- Related stocks: LO, PM, MO, VGR, RAI, OTCQX:ITYBY, BTI
LO vs. ETF Alternatives
Lorillard Inc is engaged in the manufacture of cigarettes and tobacco in the United States. The Company's principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with sales in the United States of America.
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