New Lifetime High Reached By Lorillard (LO)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Lorillard ( LO) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Lorillard as such a stock due to the following factors:

  • LO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $129.6 million.
  • LO has traded 2.7 million shares today.
  • LO is trading at a new lifetime high.

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More details on LO:

Lorillard, Inc. manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes. The Cigarettes segment manufactures and sells cigarettes. The stock currently has a dividend yield of 4.9%. LO has a PE ratio of 13.9. Currently there are 2 analysts that rate Lorillard a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Lorillard has been 3.1 million shares per day over the past 30 days. Lorillard has a market cap of $16.7 billion and is part of the consumer goods sector and tobacco industry. The stock has a beta of 0.22 and a short float of 7% with 7.69 days to cover. Shares are up 14.9% year to date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Lorillard as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • LO's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • LORILLARD INC has improved earnings per share by 14.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LORILLARD INC increased its bottom line by earning $2.81 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $2.81).
  • The gross profit margin for LORILLARD INC is rather high; currently it is at 53.57%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 24.22% trails the industry average.
  • Net operating cash flow has increased to -$517.00 million or 17.54% when compared to the same quarter last year. Despite an increase in cash flow, LORILLARD INC's cash flow growth rate is still lower than the industry average growth rate of 50.17%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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