Altria Group Inc (MO), Reynolds American, Inc. (RAI): Why This Stock Will Smoke the Competition

Hedges agree

Going into the second quarter, a total of 30 hedge funds were long Altria, a 3% decrease from the previous quarter. The top hedge fund was Gardner Russo & Gardner with a $250 million position that made up 3% of its 13F portfolio (check out Gardner’s top picks).

Meanwhile, Lorillard had 24 hedge funds long the stock. Despite being below Altria’s hedge fund interest, this was 4% increase from the previous quarter compared to Altria’s 3% decrease. Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position, worth $450 million (check out First Eagle’s high yielding stocks).

Reynolds American, Inc. (NYSE:RAI) had 15 hedge funds long the stock, which was a 17% decrease from the first quarter. David Winters’ Wintergreen Advisers had the largest position that made up 10% of his fund’s 13F portfolio (see Wintergreen’s top stocks).

Bottom line

All-in-all, Lorillard pays an impressive 5% dividend yield and is the cheapest stock among major U.S. tobacco companies. What’s more is that the company has also managed to reduce shares outstanding and increase its dividend at much greater paces than its peers, making it a top pick in the tobacco industry.

The article Why This Stock Will Smoke the Competition originally appeared on and is written by Marshall Hargrave.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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