Altria (MO) shares have taken a sharp decline recently due to the new FDA regulations which plan to reduce nicotine levels to the point of being non-addictive. History tells us that regardless of regulations smoking among teens has been on a steady long-term decline. In fact, historical trends suggest that if anything FDA regulations have proven to be counter-intuitive and may have sparked interest in teen smoking.
Executive Summary:
Altria owns the Marlboro brand which controls 40% of the US cigarette market. With a long track record of returning profit to share holders with a current yield of 3.8% (which is more likely than not to increase in the near term - fellow contributor article here), a high margin business with low capital requirements, low current valuations, and market over-reaction to news, this has created a winning combination for a strong buy.
