Stock Watch
Imperial Tobacco: International Cachet
Although smoking is declining in the U.S., the habit continues to grow apace elsewhere -- a trend that Imperial is capitalizing on.
November 19, 2004
Call Dan Ahrens the bête noire of socially responsible investing. Ahrens runs the two-year-old Vice Fund, which actively pursues companies involved in spirits, tobacco, gambling and weapons -- the kinds of stocks that socially screened funds usually avoid.
Vice stocks are ideal for uncertain times, says Ahrens: "No matter what happens in the economy, people still drink, smoke and gamble."
It's little surprise, then, that among Ahrens's favorite stocks is Imperial Tobacco Group (ITY).
Although smoking is declining in the U.S., the habit continues to grow apace elsewhere. Britain's Imperial, the world's fourth-largest tobacco company, is looking to expand its sales in Southeast Asia and Eastern Europe. In those markets, consumers increasingly prefer the cachet of its Embassy and Regal brands.
Imperial is somewhat more insulated from legal risks than its U.S. counterparts, says Ahrens.
Imperial, at $50, sells for less than 13 times forecasted earnings of $3.93 per share for the year ending next September.
--Ilana Polyak
