Altria Group Inc (MO)

(Market Call Minute.) He really likes tobacco. They are doing all the right things. This is still very investable.

She doesn’t buy cigarette stocks in general because the industry is in a secular decline, even though they generate a lot of cash. This is a very defensive name with a high yield, but you can get that yield in other companies that are in a more positive growth industry.

(Market Call Minute) Has been a great cash cow over the years.

Cigarette company that is the domestic business of PM-N, but MO-N has not done as well. They have a ton of free cash flow and pay a good dividend. They could continue to do well.

Stock has done extremely well. This is on the back of always having been viewed as a real strong income play, especially in this low interest rate environment. Although there is an uphill battle in terms of regulations and the social stigma of smoking and the numbers are on the decline, what is happening now, after all of these years, is that they have a real growth category which is E-cigarettes. Over the last couple of years their E-cigarettes has tripled and has given people a reason for hope.

These companies throw off tons of cash. Historically, have been great dividend payers with good yields. Couple of headwinds: Contra banned cigarettes and E-cigarettes. There is always the pressure due to health concerns and extra taxation. They will continue to increase dividends, are a good place to be if you don’t have ethical concerns. They are North American, but Phillip Morris is in Asia where smoking is more acceptable.

A best performing stock. Good dividend growth. May come out with their own versions of electronic cigarettes.

(A Top Pick July 12/13. Down 0.45%.) Essentially with this you are buying the dividend. Pays out 80% of its EPS. Not a growth company but trades like a bond. Normally you get into this in the summertime and hold it into December.

(Best call ever made.) Sometimes, what you don’t own is more important than what you do. In March 1993, he bought shares in Philip Morris (now Altria), the largest tobacco company in the US. Generic products were starting to eat into the business. He bought it at $61. An analyst said that something terrible was going to happen in the industry in order to fight the generic competition. Within a week, he sold his holdings for $64. The next day, the company announced they were cutting the price of their cigarettes by 20% and the stock instantly went down 26%.

Cash cow that pays a high dividend and tends to do well when the market has a volatile time during the summer period. Last year it didn’t work out very well because it had such a run up coming into the seasonal period. This year we have seen it perform at market just as we are getting to the seasonal period. Dividend 4.78%. Typically outperforms the market from July 19 to December 19.

Thinks there is no better business to be in then tobacco. Margins in the business are fabulous.

Has made quite a profit. Should she Sell, Trim, etc.? He has disciplines that focus on individual companies. If he has a company that move up from 5% to 7% or 8% of a portfolio, he trims it off to reduce the holdings. This company is a pretty standard grower as people are not going to stop smoking. Pays a great dividend.

(Market Call Minute) Pulled back and he could own it.

(Market Call Minute.) Great international growth. A little bit extended right now. Good dividend yield and slow growth play.

(A Top Pick Oct 19/11. Up 29.8%.) Even though tobacco consumption rates are declining, the litigation area is also declining. They have a lot of ability to raise prices. Strong dividend yield of 5.2%. Expects this to grow by 6% per year over the next 3 years. Very low beta.