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It's No Time to Quit Lorillard  

Lorillard investors should take a deep breath. For one thing, while its average price per pack fell from the second quarter, that was partly because of rapid growth for one of Lorillard's low-cost cigarettes, called Maverick. Lorillard sells the brand for about half the price of Newport. But Maverick's sales volume, up 52% from a year earlier, accounted for 10.7% of the company's domestic volume, compared with 6.6% a year earlier.

And Newport still has potential for growth, even with its hefty 35% share of the U.S. menthol market. In markets west of the Mississippi River, Newport accounts for less than 20% of menthol consumption, reckons Thilo Wrede of Credit Suisse. Boosting market share in western states to the national average could increase Newport volume by roughly 8%, he says.

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