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VOL. 110 | NO. 99 | Monday, May 20, 1996

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5/20 jts invest. focus AMAs anti-smoking effort having little effect Revelations of nicotine tampering had more effect on stock prices and portfolios By JAMES SNYDER The Daily News In the annals of the tobacco wars, last months exhortation by the American Medical Association to dump tobacco stocks from portfolios and mutual funds will go down as The Great Non-Event. Thats because individual investors and the big brokerage houses have virtually ignored the powerful doctors lobby, and tobacco stocks have remained stable and some have even risen. "If you look at the volume trends and price action of the stocks on the list, weve found that theyve been pretty flat for most of the companies," said Todd Lowe, Hilliard Lyons vice president for branch and marketing administration in Louisville, Ky. Tobacco stock performance only really dipped in mid-March, following another revelation indicating that cigarette manufacturers deliberately manipulated nicotine levels to hook smokers, contrary to public testimony, Lowe said. The reason why tobacco was hurt by the threat of perjury and not by the AMA, Lowe said, is that the AMA cant regulate the industry like the government might. Regulating tobacco as a drug would cut into profits and sales, a real effect on the balance sheet. And for the big investment houses, social conscience takes a back seat to the bottom line. On April 23, the AMA named 13 companies that had a stake in the tobacco industry and urged investors and mutual funds to get rid of those stocks. Some of those companies are familiar figures on the tobacco battlefield, such as RJR Nabisco and Philip Morris. But others are not known for producing cigarettes, such as Sara Lee Corp. and Mafco Consolidated. That makes it difficult to target tobacco manufacturers, because many of the companies make other things. Sara Lee and RJR Nabisco are known primarily for their food products, activities that diversify their profits, said Mike Stein, first vice president for Prudential Securities in Memphis. The companies are international in scope, too, which softens the impact of a crunch on smoking. "Philip Morris and the rest of them are so international that they can literally drop cigarette production in the United States and make money off of Europe," Stein said. So the AMA fusillade has fallen short. Philip Morris, Lowe noted, was up $4 Friday. From April 23, its stock price has grown from $89 to $95, Stein said. "No one cares what the AMA says, I hate to tell you," Stein said.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 61 331 19,904
MORTGAGES 80 391 23,305
FORECLOSURE NOTICES 0 83 8,387
BUILDING PERMITS 0 338 40,366
BANKRUPTCIES 35 231 13,335
BUSINESS LICENSES 28 76 6,213
UTILITY CONNECTIONS 0 125 13,120
MARRIAGE LICENSES 21 94 4,936

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