This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

This 'Hated' Stock Is Making Investors Rich

Stocks in this article: BTI

The company my screens identified is British American Tobacco (BTI). It's headquartered in the United Kingdom and is the world's second-largest tobacco company. British American has more than 200 brands of tobacco products and boasts a dominant market share in more than 50 markets.

Almost unbelievably, the company sold 705 billion cigarettes in 2011. As you may imagine, it is among the top-60 companies worldwide by market capitalization. We are talking the big leagues here.

Even more interestingly, the company was included in the Dow Jones Sustainability World Index for responsible businesses due to its efforts in that regard. What does it take for a tobacco company to be honored in the Dow Jones Sustainability Index? To make the list, the company had to offset the negative aspects of its business with positive environmental initiatives.

The company also resumed its stock buyback program in February and has reported a sales increase across many of its various brands.

The company is in a solid uptrend. Bouncing from a low in the $93 range on June 1, shares have skyrocketed to more than $108 in 9 weeks. The rally was interrupted by a short, sharp selloff during the 3rd week of July. But shares were quickly bought on the dip, pushing the price to the current all-time highs.

Risks to Consider: Tobacco has a bad stigma. British American faces strong challenges from regulations and class-action suits. In fact, the company currently has multiple cases in litigation across the globe. It has also been forced to clean up tobacco farm sediment in Wisconsin's Lower Fox River. These expectations are normal with a company this large, as they make a huge target for fee-hungry lawyers -- not to mention the precedents set in previous tobacco litigation.

Action to Take : Despite the negatives, British American Tobacco is a solid company with strong fundamentals. I like this stock as a breakout play right now. Buying on a close above $110 makes solid technical sense. Stops should be at $105 for this entry level with a target price of $125 within 20 months.

Dave Goodboy does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.

More from Street Authority:
Forget Solar: This Energy Breakthrough Could be "The Next Big Thing..."
The 359 Safest Banks in America
Forget the Patent Cliff, This is The Best Way to Invest in Big Pharma Now

2 of 2

Select the service that is right for you!

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 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • 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