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Pros Pick Philip Morris, Lorrilard On Altria Drop

Tuesday, 3 Jan 2012 | 6:43 PM ET

Altria shares dropped more than 3 percent Tuesday, leading “Fast Money” pros to look elsewhere for better returns.

“PM International is really where you want to be,” said trader Karen Finerman. “You have a much bigger population to continue smoking, and you have a much less litigious smoker base.”

Drop in Cigarette Sales Snuff Out Altria Gains
Altria shares dropped by 2% on Tuesday after Barron's reported severely declining cigarette sales. The Fast Money crew weigh in on the defensive investment.

Barron’s issued a negative rating on Altria, citing a high debt load, increasingly stricter regulatory environment and declining popularity of tobacco products.

Altria shares, which rose more than 16 percent year over year, closed 3.68 percent lower for the day at $28.56.

Philip Morris International, which spun off Altria, has no exposure to U.S. markets. It ticked up 0.14 percent to close at $78.59 per share. It was also named the No. 24 stock in the “Fast Money” countdown of top S&P stocks for 2011.

Trader Guy Adami wasn’t necessarily writing off Altria stock but was looking elsewhere.

“It’s building a little bit of a base here, I think, for the next move higher, and I think LO is a name you want to look at as well,” he said.

  Price   Change %Change
MO
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Lorrilard shares, the No. 13 top-performing S&P stock of 2011, rose more than 38 percent year over year. It closed at $113.27 per share.


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Trader disclosure: On Jan. 3, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami is long (C), (GS), (INTC), (BTU), (AGU), (MSFT), (NUE); Seymour is long (INTC), (BAC); Terranova is long (VRTS), (IBM), (LQD), (MUB), (EMC), (CSCO), (AXP), (SBUX), (CSX), (APC), (OXY), (XOM), (TRLG), (SWN), (V), (SU); Finerman is long (AAPL), (BAC), (JPM), (GOOG); Weiss is long (CHK), (KO), (RIMM), (QCOM), (GM), (EUO), (HPQ), (VZ), (BRCM), (AMLP), (NS); Weiss is short (FXA);

Karen Finerman, Metropolitan Capital
Fund is long (AAPL)

Fund is long (JPM)

Fund is long (IBM)

Fund is long (CF)

Fund is long S&P 500 puts

Fund is long (IWM) Puts

Fund is short (SPY)

Mike Khouw, Cantor Fitzgerald
No disclosures

Mary Ann Bartels, Bank of America Merrill Lynch
No disclosures

George Goncalves, Nomura Securities
11 Liquidity provider

Nomura International plc and/or its affiliates (collectively "Nomura") is a primary dealer and/or liquidity provider in European, United States and Japanese government bonds. As such, Nomura will generally always hold positions in these bonds, which from time to time, may be considered a significant financial interest.

Jim Iuorio, TJM Institutional Services
Has positions in (VXX) and (TBT) ETF

Tavis McCourt, Morgan Keegan
Firm makes market in AAPL, RIMM shares

Pavel Molchanov, Raymond James
Firm expects to receive or seek investment banking services from BP in the next 12 months

  Price   Change %Change
LO
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MO
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PM
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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

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  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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