On Sept. 30, David Winter added Lorillard Inc. (LO). I think he is making a bet that sales will increase based on higher volumes and higher pricing in a tobacco industry which is extremely competitive. So let’s take a look at this company and try to explain to investors the reasons this is an apparently appealing investment opportunity.
Market Share Gains for Its Leading Brand
Lorillard is a manufacturer of cigarettes and its main cigarette brand is Newport, which includes both menthol and non-menthol product offerings. In addition, the company has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. Although Governments are imposing restrictions on tobacco companies to reduce smoking through higher taxes, we see the company gaining market share for its leading brand, Newport, in both categories.
— Guru Focus