Apr. 30, 2014, 10:20 AM
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
Apr. 24, 2014, 3:33 PM
Apr. 24, 2014, 12:57 PM
- Tobacco stocks brush aside news that the FDA is moving closer to regulating the e-cigarette industry.
- Lorillard (LO +1.1%), Altria (MO +0.6%), Reynolds American (RAI +1.5%), Vector (VGR +1.1%), and Philip Morris (PM +0.6%) are all in positive territory for the day.
- The early read on the action by the FDA is that it may favor the larger players in the e-cig industry as the barriers to entry become more rigid.
Apr. 24, 2014, 4:41 AM
- The FDA is set to unveil proposals to regulate electronic cigarettes, which will include an eventual ban on sales to anyone under 18. Manufacturers will also have to gain FDA approval for their products, disclose the chemicals used in the devices and add health warning about the addictiveness of nicotine.
- The measures don't include a ban on TV ads, online sales or flavored versions.
- Lorillard (LO) commands almost 50% of the e-cigarette market in convenience stores, while Altria Group (MO) and Reynolds American (RAI) are starting to ramp up their offerings.
Apr. 17, 2014, 7:08 AM
- As e-cigarettes grow in popularity so have instances of burns, toxicity and respiratory and cardiovascular problems. Over the past 12 months, 50 complaints were filed with the FDA which matches the total for the previous five years.
- The FDA is poised to regulate the $2B industry which some observers believe will overtake tobacco's $85B in ten years.
- The long-term effects of vaping are unknown.
- Most e-cigarettes are made in China and sold under more than 300 brands in the U.S.
- The quality of the brands varies widely so some manufacturing has moved to America.
- (MO) (BTI) (LO) (PM) (ECIG)
Apr. 11, 2014, 9:06 AM
- In its latest effort to curtail smoking, the Chinese government proposes a ban on using its money to buy cigarettes as gifts or to be provided at official functions. The rule also seeks a ban cigarette advertising and smoking in public places like schools, train stations and hospitals. Miscreants would pay fines up to $32.
- China is the world's largest tobacco market. A ban on smoking in certain public places is already in effect but is largely ignored.
- (MO) (BTI) (LO) (PM)
Apr. 9, 2014, 2:44 PM
- Nomura dives into the tobacco industry to pick winners and losers.
- The investment firm's preferred pick is Reynolds American (RAI +1.1%) which shows "superior" profit growth potential in relation to peers. RAI is rated a Buy with a $66 price target.
- Altria (MO +0.6%) was initiated at Neutral as Nomura takes its 2015 EPS view to below consensus.
- The rating on Lorillard (LO -2.3%) is set at Reduce by the firm due to the inflated acquisition premium the market is giving the company.
Apr. 3, 2014, 3:34 PM
- The FDA plans to release a proposed rule establishing its authority over e-cigarettes.
- The White House's OMB is currently reviewing the proposal to assess its economic impact. It's been five months with no word on when it will be completed.
- Commissioner Margaret Hamburg believes the wait is almost over.
- Predictably, e-cig makers oppose a full spectrum regulatory regime saying it will stifle innovation, damage small businesses and hurt consumers trying to quit smoking.
- (ECIG) (MO) (PM) (LO) (BTI)
Apr. 3, 2014, 2:04 PM
- The CDC says it received 225 calls in February to its poison centers in regard to exposure to the type of liquid nicotine used in e-cigarettes.
- Many of the calls involved questions on accidental or secondary exposure to liquid nicotine.
- E-cigarette products aren't currently regulated by the FDA.
- Shares of Lorillard (LO -2.8%) and Victory Electronic (ECIG -3.6%) are down a bit further than tobacco peers (MO, RAI, VGR, PM, XXII) with the e-cig news a potential factor.
Apr. 3, 2014, 7:40 AM
- Claiming an improvement in public health and a reduction in children smokers, Health Minister Jane Ellison considers requiring cigarette firms to sell their products in plain standardized packaging.
- Predictably, tobacco companies oppose the move saying it would encourage counterfeiting and smuggling.
- Britain's retail tobacco market is worth $28B.
- (MO) (LO) (PM) (BTI)
Apr. 2, 2014, 12:04 PM
- Welsh authorities mull a ban on the public use of e-cigarettes over concerns it could lead to an increase in the consumption of conventional smokes. It would be the first such ban in the U.K.
- Bans currently exist in Singapore and Brazil. Several U.S. cities including NY and LA restrict their use in some public places.
- (LO) (PM) (BTI) (MO)
Mar. 17, 2014, 8:20 AM
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.
Mar. 4, 2014, 11:19 AM
- A merger between Lorillard (LO +2%) and Reynolds American (RAI +1.4%) would face serious regulatory hurdles, notes Jefferies.
- The deal would give the combined company close to 41% of the U.S. cigarette market.
- Shares of both tobacco players remain elevated as investors bet that some spinoff or asset sale plan could push the deal through.
Mar. 3, 2014, 3:13 PM
- Lorillard (LO +9.4%) is up sharply on volume 6X normal trading activity after a report that Reynolds American (RAI +5%) will make a bid for the company spurs buying activity.
- Financial Times reports that if a deal for the tobacco company is struck it would for a value of over $20B, although some inside sources indicate Reynolds might peel off some of the assets in its bid.
- Wells Fargo thinks a fair takeout price for Lorillard as a whole would be much higher than $60.
- What to watch: Analysts think an acquisition of Lorillard would allow Reynolds to make a stronger move into the growing e-cigarette market. Reynolds plans to launch Vuse later this year, but Lorillard's Blu brand is already a force.
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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