NEW YORK (TheStreet) -- TheStreet's Jim Cramer tells investors to buy Lorillard LO, Reynolds RAI and Altria MO because of confirmation that Lorillard has been talking with Reynolds, which means tobacco consolidation is coming.
Cramer suggests Altria, even at its 52-week high, because consolidation has always been a positive for any industry. This deal does have many potential hurdles, and Cramer's friend David Faber from CNBC has indicated antitrust issues with this consolidation.
Cramer thinks Lorillard is worth more than it is currently selling for, while Reynolds is "a giant winner." He reminds investors Lorillard has an e-cigarette business, which he calls the "real gem" with the company.
"We rate REYNOLDS AMERICAN INC (RAI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income." You can view the full analysis from the report here: RAI Ratings Report Similarly, TheStreet Ratings team rates ALTRIA GROUP INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALTRIA GROUP INC (MO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income." You can view the full analysis from the report here: MO Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV