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Altria, Philip Morris, British Tobacco: Wacky Tabakky stock shenanigans

Written By | Sep 30, 2021
Altria, Philip Morris, British Tobacco

Screen capture, trailer for Cheech & Chong’s “Up in Smoke” (Paramount, 1978). Fair use, satirical purposes.

WASHINGTON – After a nice, positive move Wednesday, US stocks reverted to their previous, nasty but traditional September form. From interest-rate sensitive stocks to continually beleaguered techs and now to high-yielding but relatively benign tobacco stocks like Altria, Philip Morris International and British Tobacco, most stock groups headed back down south today. But Wacky Tabakky seemed to get the worst of it.

To oversimplify, the US ITC decided that Altria (NYSE:MO) and Philip Morris (NYSE:PM) had infringed on the patents held by another tobacco company, R J Reynolds regarding the development and sales of their own heated tobacco devices. Which is strange, since European courts had ruled in favor of the American companies on the same issue.

Well isn’t RJ Reynolds an American tobacco company, too? The answer: Sort of. That’s because British Tobacco (NYSE: BTI) bought RJ Reynolds a year or two ago and now controls those patents.

Wacky Tabakky stocks lose a regulatory round. Big Time.

As a result of the surprise ITC ruling, counter to the EU, Altria and Philip Morris must, at least for now, cease and desist fro selling their devices manufactured under the disputed patents. The shares are currently down 5 and 4% respectively as we approach 3 p.m ET. That’s a tremendous hit for investors who, regardless of the merits of the product, buy and hold tobacco stocks primarily for their outsized yields, which currently range from a whopping 4+% (MO) to 7+% (PM).




Ironically, British Tobacco, which currently prevailed in the ITC’s ruling, is also down hard today by roughly 2.5%, even though it now yields over 8%! So in this case, the Wacky Tabakky stocks are damned if they do and damned if they don’t.

The whole surprise mess bothers us greatly, as we’ve been holding all three stocks as an inflation / yield hedge, given the currently galloping rate of inflation. Sometimes even conservative investing tactics fail when Mr Market decides to go psycho. Nonetheless, at least for now, we continue to hold modest, high-yielding positions in Altria, Philip Morris and British Tobacco. Wish us luck. Actually, this might be a good place for at least a few amoral investors to get into these shares. (Not a recommendation, however.)

More utter insanity from America’s Marxist Party, aka, the Fools on the Hill

Meanwhile, the Fools on the Hill continue to grapple with various layers of total fiscal irresponsibility. Particularly in light of President Hologram’s amazing assertion. Namely that the goodies in the Democrats’ multi-trillion dollar “infrastructure” legislation are “free.”

Back when I taught college English, some contemporary lit authors were known for their “magic” or “magical realism.” America’s Marxist Party has now transformed that term (as they’ve done with many others). They’ve created the 21st century politics of “magical surrealism.” They embedded this in their current fantasy bills. All of which involve magical funding conjured out of thin air. I guess this legislation is sort of like that 2010 Obamacare Fantasy Legislation. The legislation that had to be passed. So we could see what’s in it.

If any of this bill wins passage, we can count on two things. First, it will guarantee our kids and grandkids will revert back to a state of pre-Civil War slavery. But this time, it will be Slavery for All. (Which, I assume, would make AOC orgastic.)

And second, the bulk of the legislation doesn’t fund actual infrastructure. Rather, it will fund payoffs for wealthy supporters and union thugs who elect “Democrats” and raise debt levels to the point where debt will sink America’s Ship of State. Forever. Which, for America’s Marxist Party, is a feature and not a bug.

Covid vaccine and masquerade nonsense continues to affect America’s tepid economic recovery

As always, similar to the capricious case of Altria, Philip Morris and British Tobacco and their patent squabbles, it’s the politics of all this that has, once again, slowed or may even halt America’s post-Covid recovery. Which is slowing anyway due to the Deep State’s use of this pandemic-turned-endemic situation as a means to exert unconstitutional Total Control. One-party state, anyone?

This has markets spooked. This will kill business, permanently unemploy much of the fast-fading middle-class that President Trump had rebuilt in less than 4 years. And it will destroy our democratic republic forever, which, again, is a feature, not a bug for our homegrown Marxists.

This, plus the never-ending Covid nonsense, plus everything else that’s gone down since January 2021 (including the January 6 “insurrection” hoax narrative) has sapped the confidence of traders and investors alike since mid-summer when stocks began to falter. Investors fear an economic black hole lies dead ahead. And yet, at least for the wealthiest among them, the current Fake Administration in Washington is what they paid to “elect” last fall. Now they’re getting what they wanted. Good and hard.

The problem is, so are we.



Anyway, we hope those Wacky Tabakky stocks can regain some of their losses. Specifically, may our hapless friends Altria, Philip Morris and even British Tobacco regain today’s losses, at least.

What a mess. Like yesteryear’s rogue Crazy Eddie, everything these days is IN-SAAAANE!

 

Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17