Jump to full article: Sumfolio.com, 2009-11-02
Author: Simon Monger
Intro: Key Points
* Cigarette industry stocks have been trading higher as they represent a safe haven investment and have been reporting higher profits due to strong pricing power.
* Cigarette volumes have been on the decline amid higher prices and anti-smoking advertising campaigns, which has led to a sharp drop in demand.
* New regulations could inhibit new products from quickly entering the market, but help already-established companies maintain their dominance.
* Eventually, lower volumes will take their toll on bottom-line results as price increases cannot be relied on indefinitely to support net income.
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