Philip Morris International (PM) isn't just a traditional tobacco company; it's a forward-looking innovator moving toward a smoke-free future.
On yesterday's edition of The Pitch, Hedgeye Consumer Staples Analyst Daniel Biolsi presented Long Philip Morris (PM) as his latest high-conviction stock idea.
Biolsi pitched this idea to Hedgeye CEO Keith McCullough. Keith’s response?
“Most people are having panic attacks over Nvidia (NVDA) right now because they all own it, but over the same period that NVDA shares have crashed, this has gone up 26%."
In addition to Philip Morris, this edition features five other stock picks from top Hedgeye analysts.
As Keith and Daniel discuss on The Pitch, Philip Morris shares stand out as a resilient choice in today's volatile market landscape. PM is supported by our triple-tested process—combining 1) fundamental, 2) quantitative, and 3) macro analysis.
Why go Long PM? Keep reading...
1. Fundamentally Approved
Phillip Morris is strategically shifting from traditional tobacco products to smoke-free nicotine delivery systems.
Currently, nearly 40% of its revenue is derived from these smoke-free products, with a target to reach 66% by the decade's end. Despite secular declines in cigarette smoking, nicotine remains in demand.
PM is capitalizing on this transition with the acquisition of Swedish Match and the launch of new products like Zyn and IQOS in the U.S.
The company has achieved three consecutive years of high single-digit organic revenue growth and offers a robust $5.20 dividend —positioning it as a best-in-class consumer staple.
By the way, if you like what you just read and want more fundamental stock ideas, consider subscribing to The Call @ Hedgeye. Every trading day, you can tune-in live and watch our morning research call with our 40+ analyst research team.
2. Signal Approved
On top of our research team's fundamental analysis, our quantitative signaling process plays the most important role.
Since Hedgeye CEO Keith McCullough’s signal turned bullish, and it was added to our Signal Strength Stocks product 130 days ago, PM has surged 33%. Our signals incorporate fractal-based calculations to get ahead of big stock moves.
The best part? It’s not too late to get in on this winning stock pick, as our signal remains bullish, predicting a continued bullish trend for this stock.
However, this relies on a strong overall economy to promote growth. That’s where our extensive Macroeconomic analysis plays a role.
If you want to turbo-charge your portfolio, there are currently 50 other Signal Strength Stocks approved stock-picks that screen bullish on Keith’s quantitative Risk Range™ Signals.
3. Macro: Bullish
Hedgeye’s macro process identifies the economic environment we term "Quad 4"—a phase of slowing growth and inflation.
PM, with its $200 billion market cap, the right sector style, and factor exposures, fits perfectly into our macro framework.
As you can see, our triple-tested stock picking process that combines fundamental, quantitative, and macro analysis can be leveraged to help protect and grow your money.
Phillip Morris International represents a unique combination of defensive qualities and growth potential, making it an ideal holding for navigating current market conditions.
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The win percentage above is calculated using the closing price of the stock on the date it was added to our Signal Strength Stocks newsletter and the closing price of the stock on September 4, 2024. Stock ideas that have been removed from Signal Strength Stocks are not included. Results vary. |
