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.
TheStreet Ratings team concurs with Cramer, as it rates REYNOLDS AMERICAN INC a "buy" with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"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