Tobacco Stocks Gain Amid Heat-Not-Burn Product Growth
Posted by freemexy on February 26th, 2021
Tobacco Stocks Gain Amid Heat-Not-Burn Product Growth
Tobacco stocks have burnt a hole in investors' portfolios over the past year, dropping 0.65% on the back of declining cigarette volumes. By comparison, the broader stock market has logged a gain of nearly 20% over the same time.To get more news about HNB, you can visit hitaste official website.
To address shrinking demand from its traditional products, leading tobacco companies Philip Morris International Inc. (PM) and Altria Group, Inc. (MO) have invested heavily in developing "smoke-free" alternatives. Their latest-to-market IQOS product heats tobacco, rather than burning it, supposedly releasing fewer toxins but delivering a similar nicotine rush. Philip Morris has already launched IQOS in more than 40 markets around the world, while Altria launched the heat-not-burn device in Atlanta last fall, several months after the Food and Drug Administration (FDA) approved the product for sale in the United States.
The controversial industry has had a mostly disappointing start to 2020, although renewed buying interest in the group late last week may ignite further gains in upcoming trading sessions. As well as taking a closer look at Philip Morris and Altria below, we’ll also review tobacco leaf supplier Universal Corporation (UVV).
Philip Morris International manufactures IQOS smoke-free products, including heated tobacco and vapor products under the HEETS, HEETS Marlboro, and HEETS FROM MARLBORO brands. It also sells the Marlboro HeatSticks and Parliament HeatSticks brands. The 8.47 billion company told shareholders in 2018 that it aimed to receive about 40% of its revenue from "reduced-risk" products by 2025. Earlier this month, the cigarette maker reported a fourth quarter 41% year-over-year jump in sales of its heated tobacco products. Philip Morris stock pays an annual .68 dividend and has gained 5.35% year to date (YTD), outperforming the tobacco industry average by 4.74% over the same period as of Feb. 24, 2020.
Since bottoming out in the third quarter last year, the firm's stock has made higher lows and higher highs, placing it in a steady uptrend. More recently, price broke above a pennant pattern Friday, indicating upside continuation. Those who buy here should consider trailing a stop-loss order under each successively higher swing low to let profits run as far as possible. Start by placing an initial stop beneath the pennant pattern's low at .14.
