Carolina Group (CG.DL)

DemonDoug (99.88) Submitted: 4/11/08 4:36 PM : Start Price: $68.62 CG.DL Score: 1.94

Tobacco is an industry I'm bullish on in general. If there was a tobacco etf I'd buy it. While legislation and taxes will continue to put pressure on tobacco companies and tobacco consumers, there will always be a core group of people smoking and more smokers being born or emigrating to the US every year. One of the best things about investing in tobacco is that there is very little competition - it is at this point an oligopoly, with a few well-entrenched tobacco companies holding almost 100% of the tobacco market.

Why CG now? Well, after tracking this stock for a year, and watching it go up and down, it has finally turned down to around a 52-week low. Many of you may find that I mention this in some of my pitches; I'm a true believer in value investing and bottom fishing when the fundamentals are still there. Tobacco in general seems to be going through a rotation where all tobacco companies have recently lost value. This has not changed the solid fundamentals of these companies - and think about the fundamentals of tobacco. There are people in this country who would rather have a cigarette than a roof over their head. (Ever see a homeless person smoking? I have, and do see multiple homeless smoking every day.)

Ironically enough it seems I added CG to my watch list almost exactly 1 year ago - a lesson to anyone picking stocks in CAPS or for their portfolio, a watch list tracking some of your favorite stocks can be a real useful tool to seeing when a stock drops into your buy range.

As of the writing of this pitch, DemonDoug has no position long or short in CG.

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