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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Hank who wrote (7484)	11/25/1997 10:50:00 AM
From: Bob Trocchi	Read Replies (1) \| Respond to of 9285

Hank... >>The page you referenced is available only to paid subscribers. << Hank. Since the material I referenced is from a paid subscriber site, I will not copy and post the article in total. Below are some of the salient snippets from the story. I personally have NO position in any Cigar Company and I have not done any research. I pass this on as an FYI. 1. cigar sales are probably about to peak again. 2. And that would mean trouble for highflying cigar companies, a half-dozen of which have issued shares to the public over the past two years. 3. a variety of factors is likely to undercut the cigar trend. First and foremost, there's the fact that a fad is, by definition, a fad 4. The slowdown is already evident in sales projections. Overall, U.S. sales probably will hit 4.8 billion cigars this year, following a few years of annual growth in the 9% range. 5. This slowdown is even more pronounced in the pricey premium-cigar segment, after expanding at annual rates of 70%-80% last year and early this year, sales of high-priced brands probably will rise about 30% next year. By 1999, growth is almost certain to be still lower. 6. A maker of premium brands, General Cigar has seen its shares surge from an initial price of 18 to a recent 27. Based on his original stake in Culbro, the gains in General Cigar have helped Gabelli's funds turn tens of millions of dollars in paper profits. Now, he's beginning to sell. "We've been peeling back some of our General Cigar holdings," Gabelli says. 7. Don Shopland at the National Cancer Institute, who is putting together a lengthy monograph drawn from all salient research on the medical implications of cigar smoking. The document is now undergoing peer review and is expected to be made public in January. The report is likely to say that cigar smoking dramatically increases the risk of a range of cancers, especially those that affect the mouth, larynx and nose. 8. since August of last year, four major players in the cigar business, and some minor ones, have been brought public. Consolidated Cigar, General Cigar,800-JR Cigar, Swisher International. 9. But this situation is already beginning to change as sales growth moderates, overstocking is on the rise, and profit margins could be pinched by competitors. Clearly, unit sales can't keep growing by 70%-80%. In addition to the little snippets I have shown above, the remainder of the of the article contains a lot of financial stuff that you can get via standard sources, comments from mutual fund advisors who are scaling back their holdings, a number of positive comments especially from cigar Company execs (why not) and by implication a lot of micro brewery stock price charts that have gone down as that fad brought in a lot of companies, hype and continued increased sales only to have reality hit them in the face. I have NOT done any of my own research on Cigar companies. Good Luck Bob T.