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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO)
MO 58.60+0.9%3:59 PM EST
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To: md1derful who wrote (6119)2/12/2001 2:37:34 PM
From: Xianming Liu  Read Replies (2) of 6439
 
Doc:

Martin Feldman of Salomon Smith Barney has made some strong points on why tobacco stocks will likely move higher. You probably have heard a lot of people saying that S&P tobacco index has appreciated 93% since Jan. 2000. However, Mr. Feldman reminds us that the index is still down 12.2% since the beginning of 1999. When the present situation is compared with that of Jan 1999, the fundamentals of tobacco industry is much more favorable. First, the litigation and public policy environment is much less threatening than it was in 1999. (Remember that Mr. Clinton announced that DOJ would sue industry in his 1999 State of Union address?) In addition, the profitability of industry today is much more certain that it was in early 1999. The Asia/Russia/emerge market financial crises in 1998 really hurt the global tobacco sales. The effect of the crises has since disappeared. Furthermore, the MSA agreement at that time was threatening both industry volume and profit. Now, the industry has demonstrated that it has solved the problem quite well. Finally, Mr. Feldman noted out that US tobacco profit will likely JUMP SHARPLY in 2003 (by as much as $1.3 BILLION) as a results of the END of the MSA "upfront"; "education" and other payments.
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