We asked you to suggest companies for us to analyze. Today we look at one submission, Lorillard. Will e-cigarettes light the way for their stock?
At the end of each Talking Numbers segment, we ask you what stocks you’d like us to analyze. We received an interesting response via Twitter from @Plunky93 suggesting we look at tobacco company Lorillard.
Lorillard shares are up more than 10% over the last three months but up only slightly more than 4% for the last twelve months. Over the last five years, shares rose more than 86% and had an dividend yield of 5.4%.
Lorillard was the first major tobacco company to jump into the $2 billion electronic cigarette (“e-cigs”) business, acquiring blu ecig last year for $135 million. That’s chump change for a company with over $2 billion in cash, $6.7 billion in revenue, and $1.2 billion in profits over the last four reported quarters.
Competition in this new revenue source is heating up, though. Jumping in the e-cig market this week is Altria, a company four times the size of Lorillard. Altria plans on launching their in-house developed MarkTen in two months.
Though there’s much hype about e-cigs, should that be enough to make investors excited about buying into a first-mover like Lorillard?
We asked Jeff Tomasulo, Managing Partner at Belpointe Alternative Investments, and Talking Numbers contributor Steve Cortes, Founder of Veracruz TJM, to take a look at Lorillard and whether they think its stock will light up or burn a hole in your pocket.
To hear analysis on Lorillard by Tomasulo and Cortes, watch the video above.
Thanks to @Plunky93 for the suggestion and please feel free to submit a stock you want us to look at via Twitter, Facebook, or email: TalkingNumbers@CNBC.com
Be sure to visit Talking Numbers later today as we interview the Commodities King, Dennis Gartman, on how he’s trading the gold market.
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- Consumer Discretionary