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6 pts

Opinion on  Altria Group Inc (MO)     Sector: Consumer/Non-Cyclical  >  Industry: Tobacco
Buy Altria(MO) Because Recession Never Stops Smokers to Smoke

Jul 21, 2008 06:38 PM UTC
Blokm2-seekingalpha2
Return Risk
-7.80% MID
Associate

Tobacco companies remain to grow revenues and widen margins since they can increase prices faster than volumes fall. In Italy (PMI's largest mkt) prices (ex tax) have risen at 5% CAGR in the last 4 years, while volumes have fallen 2%. With sales up and costs down, profit increases. In the UK, Marlboro retails at $11, and retail prices are still rising at 4% a year, in-line with wages, so affordability is constant. This implies US prices have plenty of room to increase.

Read more at http://conquerthewallstreet.blogspot.com/2008/07/buy-altriamo...

MO:  This call was made on 07/21/08 @ $20.285
Rating:   Positive   $20.285 (07/21/08)
Closed:   07/24/2008 @ $21.18 (+4.41% in 3 days)
Target:   $25.00 (+23.24%) in > one year


Comments (2)

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Jeremy McDonald   77%     1 point   commented 124 days ago reply

As a former smoker I agree that tobacco is recession-proof from the standpoint that nothing supresses hunger like a cigarette.

Of course if you eat less and smoke more then you are pretty much guaranteed to die, but hunger also keeps you from thinking straight eventually leading you to smoke.

This comment could also be published as a book on how to quit smoking.
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Blokm2-seekingalpha2
Heri Setyono   71%     1 point   commented 124 days ago reply

Thanks for your comment, I'm just a little overdone.

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Heri Setyono previously rated MO
Positive -3.77% Bullish on MO ...
06/11/2008
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