Baccy Breakouts

has anybody noticed that the three stocks that make up the tobacco sector (BATS, IMT and GLH) have all broken out to the upside recently with GLM and IMT making new all time highs...

Had been looking at IMT today - gap up as well!!

:) Unfortunately as a medic, I have never been able to bring myself to invest in them!!! Sad but true.....

Looks a good buy though!!
Hi Mark,

I wonder if your ethics will prevent you from shorting it on the way down? :)

BTW. I thought that you were getting into AIQ and I wonder why you are currently looking at OT?
BAT : H1 pfts up despite slowdown
31/07/2001 10:24:43

 British American Tobacco today posted
a better-than-expected increase in
half-year pre-tax profit despite
deteriorating economic conditions and
the on-going threat of global
anti-tobacco initiatives.
The world's second-largest quoted
tobacco group posted a 33% increase in
pre-tax profit for the six months to 30
June to #936m up from #706m in 2000.
Operating profit rose 11% to #1.3bln
from #1.2bln last year due to exchange
rate movements.
Overall, cigarette sales volumes were
only slightly higher at 399bln, but the
company reported a 9% increase in
growth in its core brands Dunhill,
Kent, Pall Mall and Lucky Strike,
against the backdrop of a declining
overall market.
BAT's struggling US brand Brown &
Williamson saw a 19% increase in profit
due to higher pricing and lower costs
following a restructuring.
Jonathan Fell, tobacco analyst at
Merrill Lynch, said the company's
performance was helped by strong
results in the US, in part from
restructuring measures.
"It looks as if market stabilised in
the first half because of this," he
BAT Corporate & Regulatory Affairs
Director Michael Prideaux said while
the rate of decline in the US is
slowing, "it is too early to call the
Globally, "BAT is resilient but not
immune," he said, attributing the
company's ability to weather the
current economic storm to a consumer
trend of trading down.
When consumers have less money, they
either trade down on brand or smoke
less, he said.
"In almost every market we have a
broad portfolio of brands so we don't
lose out if consumers trade down to
lower margin brand," he said.
David Liston, equity analyst at
Gerrard, praised the company's focus on
four key brands as "a sensible," but
said he is concerned that BAT has "made
light" of the threat of litigation in
the US and EU tobacco control
BAT said: "Losing an individual case
from time to time is simply the cost of
doing business in the US and a cost,
moreover, that is by no means unique to
tobacco companies."
But life could become increasing
difficult for BAT as "the tide is
moving against them," Liston said.
"It will likely not just be the EU but
also the World Health Organisation and
other governments that will be
convinced to limit tobacco advertising
and the like," he said.
Liston also said one reason the
tobacco sector has seen such good
outperformance was the demise of the
TMT sector.
"If you believe the TMT will start to
pick up again then this is the time to
take profits from tobacco stocks," he

10:24 Jul 31 2001


A little out of date but thought it useful
Steve re Tobacco

David Schwartz at has commented today on the significance of the Tobacco sector breakout. Have a look today under his daily tips column as there is not an archive of tips - they are only on the site for one day.