This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

This 'Hated' Stock Is Making Investors Rich

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!

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs