With increasing health conscious and anti-smoking campaigns since young, tobacco / cigarette companies may not have bright future for investing. Percentage of smokers in populations of most countries (including US, Japan, Europe, Singapore, etc) are declining over the past decade with higher taxes (expenses) by local government, resulting in lower earning of tobacco / cigarette companies, therefore weaker share prices.
Philip Morris (NYSE: PM), owner of Marlboro Cigarette, is a crisis giant stock at low optimism (<25%), a low quality investing opportunity induced by declining earning over the past 5 years. Parent company of Philip Morris is Altria Group (NYSE: MO), also a crisis giant stock at low optimism but having much stronger fundamental, therefore a better choice for cigarette stock investing.
British American Tobacco (Bursa: 4261), owner of Lucky Strike cigarette, was a value investing stock in the past but with declining business and share prices, it may not be not suitable for long term investing again despite a low optimism share price.
“Buy Low Sell High” is an universal secret of making money in stocks, main condition is the business has to be strong and sustainable, then each price correction is an opportunity to buy at discounted price. However, “Buy Low” may “Get Lower”, “Buy Cheap” may “Go Bankrupt”, if buying crisis stock with high debt, declining business (earning, cash flow, asset values, etc). So, do not fall into value trap by blindly “Buy Low”. Integration with Fundamental Analysis (FA) is required.
Buy a stock implies being a business partner. If uncomfortable in supporting “unhealthy” businesses (eg. tobacco, gambling, alcoholic drinks, etc), there are many other healthy businesses (eg. healthcare / hospital stocks) for stock investment.
Learn from Dr Tee in free 4hr stock investment course for public on various healthy businesses of giant stocks. Register Here: www.ein55.com
