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Hedge Fund Trade Of The Week: Lorillard

Where’s the fast money finding opportunity? In this regular feature Anthony Scaramucci aka The Hedge reveals his latest greatest pick!

“This week’s trade is long cigarette maker Lorillard ,” he says. “It’s the maker of the second leading brand of cigarettes in the US – Newport.”

Scaramucci says this stock is a favorite among some of the biggest hedgies including Omega, Eton Park and Tiger Global.

And the smart money likes this stock because it’s an inexpensive name that’s also defensive. “It trades around 8 times earnings and has a dividend yield of 5.3%.”

Even if the market performs poorly, Lorillard should continue to climb. “In a deflationary or low inflation environment this name should still do quite well.”

Hedge fund manager Karen Finerman shares Scaramucci’s thesis but prefers playing it long Philip Morris.

”I prefer to smoke internationally,” she says. “There’s less litigation risks.”

* Anthony Scaramucci runs SkyBridge Capital, a leading alternative asset manager with more than $7 billion under management. Every week on Fast Money, Scaramucci, aka 'The Hedge', provides an unprecedented look at the names getting the most chatter across the hedge fund community.



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Trader disclosure: On Aug 12, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova owns (AKAM), (BAX), (FCX), (MOS), (OXY), (PFE), (POT), (SU), (XBI), (GLD); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Finerman owns (AAPL); Finerman owns (GOOG); Finerman’s firm owns (HPQ); Finerman and Finerman’s Firm owns (BAC); Finerman and Finerman’s Firm owns (JPM); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russsel 2000 puts; Jon Najarian owns (CSCO) short calls; Jon Najarian owns (VIX) Call spread; Jon Najarian is short (SQQQ)

Anthony Scaramucci
SkyBridge Capital owns (LO)

For Patty Edwards
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Stephen Weiss
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David Riedel
***No Disclosures***

Colin Gillis
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Brian Stutland
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