Cigarette Companies That Are Best Positioned Against Their Peers
By Dividendinvestr:
By Guan Wang
Some investors avoid investing in certain sectors, like the tobacco industry, because of uncertainty over what will happen with regard to external factors like regulation and consumer preferences. There is a theory that "sin stocks", like tobacco stocks, outperform the market because of loyal followings that are generally willing to pay a premium for the "sinful" product of their choosing and the relative oligarchy of companies in the industry thanks to high barriers of entry. In the case of tobacco, government regulations have certainly limited the growth in the tobacco industry, but, on the other hand, regulations have also elevated the barriers to entry into the industry. The risk could be worth it. The most popular tobacco stock amongst the hedge funds we track is Philip Morris International (PM). There were 39 hedge funds with this stock in their 13F portfolios at the end of last year.Complete Story »
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