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$52.31 -0.33 (-0.63%)
9/5/2008 4:02 PM

Reynolds American, Inc. (RAI)

CAPS Rating:
***

A parent company of R.J. Reynolds Tobacco Company; Conwood Company, LLC; Santa Fe Natural Tobacco Company, Inc; and R.J. Reynolds Global Products, Inc.

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Recs

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Avatar DemonDoug (99.93) Submitted: 3/18/08 2:36 AM : Outperform Start Price: $60.09 RAI Score: -8.19

Pro's:
1. Tobacco (oligopoly due to MSP, demand, currency play, at least follows if not beats inflation)
2. Huge dividend
3. Great track record
4. Defensive play
5. Inflation hedge.
6. Addictive product that people don't stop using
7. More money in the developing world means more disposable income for vices.

Con's:
1. Governments taxing and making laws against it.
2. You can smile and feel good when you see someone lighting up, they are increasing your wealth.

Oh wait that last one is actually a good thing. :)

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Avatar TMFPhila (99.41) Submitted: 7/14/08 4:41 PM

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I'm also bullish on RAI, but unfortunately, at this point, RAI is only domestic. About 99% of their revenues are derived from the U.S. This due to two things: 1) A non-compete agreement with BTI stemming from the restructuring after RJR Nabisco and 2) Its international tobacco business was sold to Japan Tobacco in 1999. The non-compete with BTI ends in July 2009, though.

See this company fact sheet for more: http://www.reynoldsamerican.com/Investors/FactSheet.aspx?mp=investor

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