1 Bad Sign for Big Tobacco Investors

This video is part of our "Motley Fool Conversations" series, in which analyst Austin Smith discusses topics around the investing world.

Big tobacco companies are always fighting off some sort of negative force. Today it's the FDA, which recently announced that it will require tobacco companies to report levels of 20 known dangerous chemicals found in their products. Furthermore, the FDA must now approve tobacco products that are going to be advertised as "safer" or "reduced risk." The power to regulate marketing has hugely negative implications for this industry, which relies so heavily on brand strength. Of course, some companies are more affected than others. Hit hardest will be domestic manufacturers such as Altria and Reynolds America. On the other hand, this move acts as further evidence for the investing case for internationally focused companies such as British American and Philip Morris.

They aren't the only two companies with a serious stake in international growth. There are three U.S.-based companies that have set their sights abroad for faster growth as well. You can learn about them in our report: "3 Companies Set to Dominate the World." The report won't be available forever, so we invite you to enjoy a free copy today. You can access it by clicking here. Enjoy, and Fool on!

Austin Smith has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On April 08, 2012, at 5:41 PM, altajoe wrote:

    Seriously? The FDA could force the tobacco companies to put a skull and crossbones on each pack large enough to cover 80% of the package. Then they could make them write the word POISON on the other 80% and the morons that smoke would still buy them.

    BTW, I'm long on MO and PM and will continue to be.

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