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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Geoff who wrote (2014)	7/28/1998 8:54:00 AM
From: Ralph Bergmann	Respond to of 6439

"Now the question I have is about the rally in the tobacco sector as late. Does everyone think that the rally is due to the growing optimism over a settlement with the states? Or can some of this rally be attributed to the shakiness of the overall stock market, after all, MO is by nature a defensive play in turbulent times. " I think the truth lies more likely in the second point. Last October, when the market was very jittery, the safe harbor was AT&T. I think MO plays this role now. But isn't it too dramatic to speak of a rally in the tobacco sector? I think it is more a technical correction. But anyway I like the move upwards, since I am deep into MO calls. Good luck! Ralph

To: Geoff who wrote (2014)	7/28/1998 9:05:00 AM
From: Rarebird	Read Replies (2) \| Respond to of 6439

This rally is for real, has legs to it and is based on a few reasons: 1) MO reported earnings last week that met Street Estimates and topped last years results by 9%. This may not be great for MO, but it is sure a welcome reprieve from the pitiful earnings that have been coming out of the S&P 500 this quarter. Year over year comparison is about 2%. 2) On the day they reported earnings, company officials announced ( without being asked ) the renewed possibility of a share buyback beginning in the fourth quarter. 3) Clinton has given up hope on any settlement resembling the McCain bill and has stopped jaw boning the tobacco industry. 4) The litigation front has turned positive for the tobacco industry and a favorable settlement with the state attorney generals looks promising. 5) Economic growth is slowing rapidly as we speak. As a consumer staple, MO provides consistency of earnings growth that few companies can match. The Market is ready to reward it by expanding its multiple. 6) Technically speaking, MO is now in an uptrend. The stock is now sitting above its 200 and 400 day moving averages for the first time since February. It has not gone un-noticed by astute market observers that the stock broke out to the upside as the rest of the Market headed south. I see a continuation of the uptrend in the coming weeks. Given such adverse market conditions, the breakout was very impressive on heavy volume. We are at the beginning of the breakout.