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Why Philip Morris (PM) Stock is a Compelling Investment Case

First Eagle Investment Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. The First Eagle Global Fund A Shares posted a return of 14.73% for the second quarter (without sales charge), underperforming its benchmark, the MSCI World Index which returned 19.36% in the same quarter. You should check out First Eagle’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, First Eagle highlighted a few stocks and Philip Morris International Inc. (NYSE:PM) is one of them. Philip Morris International Inc. (NYSE:PM) is a cigarette and tobacco manufacturing company. Year-to-date, Philip Morris International Inc. (NYSE:PM) stock lost 9.4% and on August 4th it had a closing price of $77.10. Here is what First Eagle said:

“Philip Morris was able to recover some of the ground lost during the first quarter selloff but remains well below its early-year highs. Tobacco industry volumes were hurt by Covid-19, as lockdowns and other social-distancing restrictions in certain key markets hurt demand. Duty-free sales also suffered given the lack of global travel during the period. Given its pricing power, cost discipline and robust balance sheet, we believe Philip Morris appears well positioned to navigate the ongoing transition from traditional combustible tobacco products to “heat not burn” alternatives.”

Cheapest Cigarette Brands in 2018

MeskPhotography/Shutterstock.com

Last month, we published an article revealing that Distillate Capital is bullish on Philip Morris International Inc. (NYSE:PM) stock. The investment firm believes that the PM stock is trading at an attractive level.

In Q1 2020, the number of bullish hedge fund positions on Philip Morris International Inc. (NYSE:PM)  stock decreased by about 16% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Philip Morris’ growth potential. Our calculations showed that Philip Morris International Inc. (NYSE:PM)  isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.