360 Degrees of Altria

Editor's Note: TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you "360 Degrees."

"360 Degrees" is a feature that takes advantage of our varied stable of contributors to RealMoney.com, who offer analysis of stocks and the markets from all angles -- fundamental vs. technical, short-term trader vs. long-term investor.

Today's subject is Altria(MO Quote).

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Light 'Em Up With the Gurus, by John Reese

Originally published on 5/12/2006 at 1:37 p.m.

Tobacco may smell bad, and many may think it immoral, but it can be a very good business. The best in the business is Altria, and if you don't have qualms about tobacco, this is an investment opportunity you shouldn't let go up in smoke.

Since I recommended the stock last May, it has risen 10%, not including dividends -- not bad for a large-cap stock. The best may be ahead.

Sales are up, it has grown its domestic tobacco market share and it is aggressively seeking to expand in developing markets. Litigation problems, while not over, seem to have abated. It has an 85% stake in Kraft, the second-largest packaged food company in the world. Four years ago, Altria sold Miller Beer and took a 29% equity stake in the buyer, now called SABMiller, which is based in South Africa and is one of the world's largest brewers.

The company continues to make acquisitions, grow and do well, and the guru strategies I use to analyze stocks once again think the company is a buy.

The O'Shaughnessy Strategy

My strategy based on James P. O'Shaughnessy's investing style screens for large, well-known companies with market caps over $1 billion and strong cash flow. Altria has a hefty $5.81 per share in cash flow, well above the S&P 500 mean of 14 cents per share.