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Altria Expands Premium Cigarette Category with Sherman Buy
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Tobacco giant, Altria Group Inc. (MO - Free Report) has taken over privately-held Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman) in an attempt to expand its premium smokeable category. However, the company did not disclose the terms of the transaction.
Nat Sherman specializes in super-premium cigarettes and premium cigars. The takeover is in sync with Altria’s growth strategy of expanding its portfolio. Additionally, Nat Sherman joins Philip Morris USA Inc. and John Middleton Co. as part of Altria’s smokeable products segment.
A family-owned and operated business, Nat Sherman was founded in 1930 and operates across Greensboro, North Carolina and is currently in limited distribution throughout the U.S. Moreover, the company runs a flagship store in New York City.
The takeover is anticipated to benefit Altria’s smokeable segment which is plagued by declining volumes as more and more consumers are switching to alternative, less harmful tobacco products. However, the company has remained afloat with its strong pricing power. The company has a history of repeatedly increasing prices of its cigarettes. The regular market share gains by the company’s brands despite repeated price increase in several markets shows the company’s strong business model and strength of its key brands.
Altria, a Zacks Rank #3 (Hold) stock has been grappling with increased competition in the vapor category, declining volumes of cigarettes, strict anti-smoking regulations by governments globally and currency headwinds. However, its focus on unconventional tobacco products is likely to cushion the stock.
Altria’s stock price history reveals that it hasn’t disappointed for quite sometime. In fact, in the past three months, the shares of this tobacco maker have risen 10.6%, outperforming the Zacks categorized Tobacco industry, which has showcased a gain of 5%.
ConAgra Foods has an expected earnings growth of 8%. Campbell Soup has an expected earnings growth rate of 5.6%, while Pinnacle Foods has a long-term growth rate of 6.5%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Altria Expands Premium Cigarette Category with Sherman Buy
Tobacco giant, Altria Group Inc. (MO - Free Report) has taken over privately-held Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman) in an attempt to expand its premium smokeable category. However, the company did not disclose the terms of the transaction.
Nat Sherman specializes in super-premium cigarettes and premium cigars. The takeover is in sync with Altria’s growth strategy of expanding its portfolio. Additionally, Nat Sherman joins Philip Morris USA Inc. and John Middleton Co. as part of Altria’s smokeable products segment.
A family-owned and operated business, Nat Sherman was founded in 1930 and operates across Greensboro, North Carolina and is currently in limited distribution throughout the U.S. Moreover, the company runs a flagship store in New York City.
The takeover is anticipated to benefit Altria’s smokeable segment which is plagued by declining volumes as more and more consumers are switching to alternative, less harmful tobacco products. However, the company has remained afloat with its strong pricing power. The company has a history of repeatedly increasing prices of its cigarettes. The regular market share gains by the company’s brands despite repeated price increase in several markets shows the company’s strong business model and strength of its key brands.
Altria, a Zacks Rank #3 (Hold) stock has been grappling with increased competition in the vapor category, declining volumes of cigarettes, strict anti-smoking regulations by governments globally and currency headwinds. However, its focus on unconventional tobacco products is likely to cushion the stock.
Altria’s stock price history reveals that it hasn’t disappointed for quite sometime. In fact, in the past three months, the shares of this tobacco maker have risen 10.6%, outperforming the Zacks categorized Tobacco industry, which has showcased a gain of 5%.
Stocks that Warrant a Look
Some better-ranked stocks in the broader consumer staples sector include ConAgra Foods Inc. (CAG - Free Report) , Campbell Soup Company (CPB - Free Report) and Pinnacle Foods Inc. , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ConAgra Foods has an expected earnings growth of 8%. Campbell Soup has an expected earnings growth rate of 5.6%, while Pinnacle Foods has a long-term growth rate of 6.5%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>