With the COVID-19 pandemic turning everyone’s routines
inside out and demonstrators taking to the streets day after day to protest
racism and police violence, the stress levels in the United States are surging.
If there was ever a time a person might want to light up a cigarette, this is
it.
Does that mean this might also be the time to invest in
tobacco stocks?
It seems that the answer is maybe not, if you look at the
price trends for Altria Group Inc. (NYSE: MO). Shares dropped to $30.54 on
March 23, when the stock market plunged because of the COVID-19 pandemic. Like
many stocks, the price has come back but has not regained its levels from
earlier this year.
After trading close to $50 a share throughout January,
Altria is now in the low 40s, closing at $42.72 on Friday. Instead of spiking
upward since March, the stock has risen somewhat then stayed fairly stable.
This has drawn the attention of Stifel analyst Christopher
Growe, who points out that Altria, based in Richmond, Virginia, has largely
missed out on the rally in consumer goods. Even so, he reiterated his Buy
recommendation.
“The tobacco stocks, especially Altria, seem to find
controversy at every turn,” Growe said Monday in a research note cited by
Barron’s, “with investors increasingly focused on the negatives and the risks,
which have always been ever-present for this industry, and not rewarding the
improvement in the fundamentals.”
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