Friday, January 27, 2017

Is Tobacco On Fire?

With the recently revised merger between British American Tobacco(BTI) & Reynolds America(RAI) I thought it'd be a good idea to review the performance of our other
tobacco holdings.  Some of which have been on fire the last couple months.

Here is a chart depicting the performance of Altria(MO), Phillip Morris(PM), Vector Group(VGR), and Universal Corp(UVV)

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All show strong performances, but what's noteworthy is the huge run we've seen in one of our lesser known holdings Universal Corp(UVV) with a 34% gain since December 2016. A lot of this run up is due to the increased expectations for the vaping sector. Universal is a supplier of liquid nicotine and other components for vaping liquids. The company is more of a pure play on this trend than the major tobacco companies which will have to compete amongst themselves. Also UVV has already positioned itself as a major supplier for the big tobacco companies.

Here is the performance for all tobacco holdings since December 2016

 UVV - 37.39%
 RAI - 12.15%
 MO - 11.83%
VGR - 7.48%
PM - 10.41%
BTI - 13.51%

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