On Jan 06, Zacks Investment Research upgraded
Altria Group Inc.
) to a Zacks Rank #1 (Strong Buy) after it entered into a
strategic agreement with
Philip Morris International Inc.
) to combine their marketing power to ramp up the distribution of
Why the Upgrade?
On Dec 22, 2013, Richmond, VA-based Altria Group entered into
a strategic agreement with Philip Morris under which Philip
Morris will market Altria's MarkTen e-cigarettes internationally
and the latter will distribute two of Philip Morris' heated
tobacco products in the United States. The heated tobacco
products are claimed to be less harmful than conventional tobacco
products as they heat the nicotine instead of burning them.
Altria and Philip Morris have also decided to partner on a
regulatory engagement related to the products. The two companies
will also work on gaining shares as well as improving existing
versions for the products. Such collaboration is encouraging as
it will help the participating companies maintain market share
amidst declining volume and growing awareness against tobacco
In Nov 2013, Altria decided to hike the price by 7 cents per
pack on its Marlboro and L&M brands. In addition, Altria's
subsidiary, PM USA has raised the list prices by 7 cents per pack
and Marlboro Snus Tins by 6 cents. The price hike is encouraging
as this will help Altria maintain margins amidst declining
Moreover, Altria has been reporting strong results for the
past several quarters backed by higher operating income and
pricing power. We expect the momentum to continue in the upcoming
fourth quarter as well.
Other Stocks to Consider
Some better-ranked tobacco companies include
) carrying a Zacks Rank #1 (Strong Buy). Another consumer staple
company worth considering is
Green Mountain Coffee Roasters Inc.
). Which carries a Zacks Rank #2 (Buy).
GREEN MTN COFFE (GMCR): Free Stock Analysis
LORILLARD CO (LO): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
PHILIP MORRIS (PM): Free Stock Analysis
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