By Dave Goodboy
NEW YORK ( StreetAuthority) -- There is no question that smoking is a dirty, unhealthy habit. I can remember back when smoking was popular. The smell of cigarette smoke permeated nearly everything, particularly public spaces and offices. Even in high school, where it was banned inside, there was a smoking area outside the cafeteria, and restrooms were often clouded with gagging smoke.
In other words, it seemed like almost everyone smoked. You would see it on TV, talk shows -- even famous athletes smoked regularly. Believe it or not, Great Britain's 1984 Olympic Silver Medalist Hurdler Shirley Strong was a smoker!
Then, everything seemed to change. The government declared war on smokers and tobacco companies. It followed with waves of anti-smoking propaganda, taxation and a massive class-action law suit against tobacco companies. Smokers saw these actions as an assault on personal liberty, while the anti-tobacco movement claimed to be saving lives and cleaning up the environment.As billion-dollar verdicts were handed down against the tobacco interests, the public perception of smoking changed radically in the Western World. Once regarded as "cool," smoking evolved into a marginalized activity generally reserved for addicts and rebels. But in emerging markets outside of the United States, smoking is still considered a "cool" activity. Savvy tobacco companies have turned their focus to these niche markets in search of profits. Given how addictive cigarettes can be, poor economic conditions do little to hinder demand. Think of smoking as a cheap high that can quickly become addictive. This is the demand trigger that tobacco companies exploit. I'll leave the moral judgment to others, as our purpose here is to find profitable investments. Recently I was shocked when my stock-screening system discovered a stock in this sector that is making investors wealthy. This stock has spiked 16% since June 1 and is up 135% since March 2009. It has a market capitalization of more than $100 billion, with a book value of $13 billion. The price-to-earnings ratio came in at about 21 with a dividend yield of about 3.9%. Sound like a solid investment? You bet!