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Shares of the leading tobacco maker, Altria Group Inc. (MO - Analyst Report) reached a new 52-week high of $38.17 on Thursday, Dec 18, 2013 eventually closing at $38.16, yielding a year-to-date return of 17.27%. The hike came in the wake of a favorable ruling by the highest court of New York.

Share Price Drivers

On Dec 17, 2013, the highest court in New York ruled that Altria will not have to undertake any form of medical monitoring for long-term smokers who do not show any signs of disease caused by tobacco.

The new rule is a continuation of a suit filed in 2006 by some long-term smokers of Marlboro-branded cigarettes. They demanded help from PM USA, a subsidiary of Altria Group for low dose CT scan monitor for lung cancer.

The recent ruling by the New York court comes as a bright spot amid several headwinds faced by the tobacco industry. Anti-tobacco campaigns and restrictions imposed by governments around the world are also posing a threat to the tobacco majors.

The EU government has already imposed a ban on e-cigarettes. We now await the Food and Drug Administration’s (FDA) decision on e-cigarettes. All these factors have lowered worldwide tobacco consumption which in turn has led to a decline in shipment volumes.

Other Stocks to Consider

Altria carries a Zacks Rank #3 (Hold). Better-ranked consumer staples stocks include Mead Johnson Nutrition Co. (MJN - Snapshot Report), Hormel Foods Corp. (HRL - Analyst Report) and Green Mountain Coffee Roasters Inc. (GMCR - Analyst Report). All these companies carry a Zacks Rank #2 (Buy).

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