Lorillard, Inc. (NYSE:LO)

oldmanandthesea (81.75) Submitted: 1/13/2011 7:25:09 AM : Start Price: $72.05 LO Score: +70.58

First the regulatory BS going on:Not a lot of scientific evidence that menthol leads to increased levels of addiction and cancerI give gov't the benefit of the doubt (almost laugh as I type that) that they have read history and understand what happened following ProhibitionFDA just adds additional regulation or warning labels, a total ban will not take placeThe investment case for LO:LO will continue to add some diversification to the portfoliol; expect sales to grow in the low single digits and mkt share in menthols will continue to holdWill continue to increase dividends and buy back stock (they have already leveraged their finances to capitalize purchases - smart move)Added some prominent mgt - former Altria guys; needed a good CFO so they would stop falling short on Wall St estimates Eventually, LO will sort of "run out of options" so to speak in terms of what it can do to grow share price and will sell; it is only a small player among giants but has an incredibly valuable brand that others would love to add to their portfolios - premium brand menthols, very high profits margins, minority consumers, etc.LO will go out at similar valuations of other tobacco companies - approximately 15x earnings (at times even higher a la UST) - so if LO is able to earn at least $7-8 (should easily happen) over the next 3 yrs we reach a target of $105-120How do you like dem' apples?Personally, with cheap financing available & the cost cutting another big could implement, I think another company would move on the purchase within the next few years but LO will do well regardless