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Are tobacco stocks no longer bulletproof?
by James Phillipps on Oct 23, 2013 at 13:28
‘The market is still some way from discounting this in share prices,’ he said. ‘For this reason I sold BAT earlier this year, a difficult decision as it is a stock I had held for all of my investment career thus far.’
Saracen investment director Daniel Leaf is also cautious, adding that on a valuation basis, tobacco stock prices are now on par with pharmaceuticals, which have growing rather than declining revenues and cash flow.
‘We believe analysts and investors have become complacent when looking at the sector,’ he said. ‘The challenges facing the sector are intensifying; e-cigarettes offer a novel and potentially profound shift in the industry’s dynamics.’
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