Philip Morris - A Stock For Wealth Or Poverty (MO) Message Board

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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO)

MO 57.56

-1.1%

1:17 PM EST

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To: Xpiderman who wrote (1467)	4/25/1998 7:38:00 PM
From: Rarebird	Read Replies (3) of 6439

There were 3 separate sections in Barrons where they discussed tobacco stocks. The article you referred to which was an interview with Kurt Feuerman, mutual fund manager at Morgan Stanley was bullish. Basically, Feurman has begun to buy the tobacco stocks and has a price target of $54. His analysis is very interesting but, in my opinion somewhat flawed. He thinks one of three things will occur. 1) He thinks Clinton will bring the two sides together and make a deal which will be congenial to shareholders and the Gov't. Personally, I think Feurman is giving Clinton to much credit here. I think Clinton is in LA LA Land and is incapable of bringing about a true settlement. 2) Feurman thinks a modest excise tax will be passed and the tobacco companies will be forced to defend themselves in court. Here he thinks MO will aggresively repurchase its shares and the stock will rally. 3) Congress will pass devastating legislation which the tobacco companies will not be able to sign off on. This possibility is remote insofar as MO is the biggest taxpayer to the Gov't and there is a real threat MO will take its operations overseas. ( Jardine Matheson delisted from the Hang Sang and went to the Straight Times in Singapore and their stock got crushed by 50%. In the Trader, MW3, the Goldman Sachs view is presented where Mare Cohen says that in light of the litigation problems and deteriorating earnings growth MO is not cheap. In Trading Points on MW8, Leslie Alperstein, an executive manager of HSBC, says that the industry made a big mistake in withdrawing from settlement talks. This is an election year and republicans in Congress will not risk their jobs by defending the tobacco industry. A devastating deal is a real possibility and if it gets realized all the Bullish Analysts will throw in the towel and Mo will plunge.

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