Standout Stocks in a Packed Tobacco Field

Tobacco has been on a roll, but don't smoke 'em all

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Standout Stocks in a Packed Tobacco Field

#3: Reynolds American

ReynoldsAmerican Standout Stocks in a Packed Tobacco FieldWhile the 5.1% yield is tops for the group, Reynolds American (NYSE:RAI) also seems to be dealing with more than its fair share of cigarette-related headaches.

For starters, the 9th U.S. Circuit Appeals Court has decided the case against Reynolds American subsidiary R.J. Reynolds can resume. Ten individuals jointly sued RJR’s Camel brand for failing to redeem ‘Camel Cash’ beginning in 2006. The case had been thrown out, but it’s being brought back into the legal system. Though redeeming the Camel Cash is likely a minor liability, fighting the case can be expensive, and the publicity black-eye can do even more damage.

Additionally, though it’s true of all cigarette makers, the declining number of smokers appears to be taking a bigger-than-average toll on Reynolds American. The company has already started to shed 10% of its workforce due to the decrease in smoking. That’s rarely a good sign.


Article printed from InvestorPlace Media, http://investorplace.com/2012/07/standout-stocks-in-a-packed-tobacco-field/.

©2014 InvestorPlace Media, LLC

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