Warning - Tobacco Stocks May Cause Your Portfolio to Rise
It’s a nasty habit, but investors just can’t shake tobacco stocks. The sector’s been smoking hot this year, as tobacco companies have the one thing most industries don’t: pricing power. Now, a European merger and Altria’s (Mo) spin-off of Kraft have left some investors with an insatiable desire for unfiltered cigarette stocks. Should you light up, or could potential legal risks putout your portfolio?
Guy Adami says the Philip Morris valuation is wrong. Once Kraft has been spun-off, Philip Morris stock is going higher. Guys says buy Philip Morris “when issued” shares.
Jeff Macke says he loves Philip Morris (MO). They sell a ton overseas, consequently brining in profits in other currencies, inflating their bottom line. This is also a way to play the dollar.
Tim Strazzini says after the spin-off was approved the stock drifted down from 90. He thinks the way to trade it, is sell the 85 puts. (In other words make the bet the stock won’t go down).
Instead, Eric likes Loew’s (LTR) which does a lot of business outside the US. He says they’re going to get a lot of upside on the dollar.
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On MAR 16, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC's Fast Money were owned by the Fast Money traders. Bolling Owns (DIS), (ICE), (NMX), Gold, Silver, Soybeans, is Short S&P Futures, is Short Nasdaq Futures, is Short Corn: Strazzini Owns (JRT), (MER)