Although some might think the tobacco industry is dying due to increasing taxes and continued lawsuits against tobacco companies, investors believe that smokers’ addition to cigarettes and oblivion to ever-increasing prices makes them attractive investments, The New York Times reports. And even though tobacco companies continue to pay billions of dollars in settlements, many investors believe the worst of the litigation is over.
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“Something that is forgotten in all of this is that people like to smoke,” said David Adelman, an analyst with
“You take away Kraft out of Altria and you are left with a balance sheet that is extremely strong,” said Charles Norton, portfolio manager of the Vice Fund. “It’s just a cash cow. The free cash flow on this business is just tremendous.”