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-$1.33 (-2.05%)
02:44AM (15 mins delay)
Oct 09, 2009 - 4:03 AM EDT
US-based Altria Group (MO) is a holding company with subsidiaries operating in tobacco products and alcohol. Altria is also the largest shareholder in UK-listed brewer, SABMiller plc (SBMRY.PK), with a 27.37% stake. The non-cyclical nature of the company's products prevented Altria shares from dropping as far as the broader market during the past year. However, the company's stock has lagged behind the market during the strong recovery over the past six months.
Altria Group's business lines are under constant threat of regulation. Altria owns Phillip Morris USA, the largest tobacco maker in the US. In June, President Obama enacted a law giving the Food and Drug Administration authority over the tobacco industry. Altria supported the move, while rivals such as Reynolds American Inc (RAI) fought the regulation and have challenged the law, stating that it violates their right to free speech. One of the moves that the FDA has made since the law came into effect was the September 22nd ban on all sales of flavored cigarettes excluding menthol. Altria's Phillip Morris USA was unaffected by the ban, while another one of its subsidiaries, John Middleton, makes flavored cigars, which continue to be legal and may benefit from the ban.
Source: Seeking Alpha (Oct 09, 2009 - 4:03 AM EDT)
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