In some ways, cigarette consumption has trended lower in developed countries. Stricter regulations on sales have been enacted in different states to curb consumption. According to a new Federal rule, e-cigarettes and other such similar devices will now be more regulated. The industry also faces sluggish global macroeconomic conditions and currency related headwinds. With that said, the developing world is still a growth market for big tabacco, as the twin tailwinds of rising population and increasing disposable income power gains. Due to demand from the developing world, the tobacco industry is expected to continue to grow in the future, although at a slower rate. Below we look at some of the tobacco stocks which could benefit from this trend.
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Philip Morris International Inc. (NYSE:PM) continued to be the top tobacco stock among the hedge funds that we track, though the number of funds with Philip Morris International Inc. (NYSE:PM) in their portfolios inched down by 2 to 45 during the third quarter. The value of their holdings also came down to $4.51 billion from $4.61 billion quarter over quarter. Although Philip Morris International reported a decline of more than 5% in cigarette shipment volumes for the period ended September, analysts estimate that the company will grow its EPS by an average of 7.84% annually for the next five years. Its dividend yield is attractive at 4.7%. Amongst the largest movers were Two Sigma Advisers and Maverick Capital Ltd buying 1,375,054 and 1,089,868 shares, respectively, during the quarter.
Click next to see info on the other four tabacco stocks on our list.