Phillips Morris (PM) Looks to new products for Growth

• At its shareholder meeting, PM said new products in its key brands like Marlboro will help grow cigarette sales overseas.
• CEO Louis Camilleri said that the company is seeing growing consumer interests for new and innovative products.
• Their focus has now been on lighter-tasting, smoother and slimmer cigarettes. There is also an increasing demand for menthol cigarettes in some markets.
• Marlboro Filter Plus cigarettes held 2.5% of the market in Romania.
  • The cigarette contains tobacco inside their filters to add flavor and are sold in a new style of slide-open package.
• PM improved profitability by raising prices.
• 1Q revenue was at its highest ever now.
• They are also pursing sales of smokeless tobacco to replace the revenue they are loosing as cigarette demand falls.
  • Thus, they have now joint ventured with Swedish Match.
• PM controls about 16% of the market for cigarettes outside the US and the pricing power puts it in a better position than others.
• In 2008, Annual net income rose 14% from $6.04 billion in 2007. 
• Dividend yield is at a juicy 6% for now.

Technicals

Long term down trend line since August 2008 has been broken.   Key support level is at $36.16 with overhead resistance currently at $39.12.  Looking for a break out above those levels. 

Entered at $36.98 last Friday.  With a stop loss at $35.07

Source: SeattleTimes

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