Nelson Peltz Fills His Pipe With Philip Morris (PM), Lorillard (LOR) and UST (UST)

August 14, 2008 6:20 PM EDT

In activist investor Nelson Peltz's latest 13F filing, he built stakes in three tobacco companies, including Philip Morris (NYSE: PM), Lorillard (NYSE: LOR) and finally UST Inc (NYSE: UST). It seems Peltz is taking a concentrated bet on the tobacco industry with these latest investments. Although, Peltz is located in New York where smoking is illegal inside public establishments, he is jumping full-force into the tobacco sector.

During the quarter, Peltz bought 350,903 shares of Philip Morris, 983,269 shares of Lorillard and 983,269 shares of UST.

As noted in previous articles on Peltz today, he looks for companies that produce healthy cash-flows and are shareholder friendly.

Philip Morris is trading just below its 52-week high, while Lorillard is trading just above its 52-week low and UST is trading in the mid-range of its 52-week low and high.

I think these are interesting purchases from Peltz, who lately has focused more on the tough restaurant sector. As spending from the consumer slows, restaurants definitely take a hit. But, perhaps Peltz made this bet on tobacco because consumers are unwilling and unable to cut out Philip Morris, Lorillard or UST from their budgets. Ostensibly, addiction is a perfect investment for this type of market.
-Guy Baron
To learn more about Nelson Peltz click here.

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UST Inc. through its direct and indirect subsidiaries is engaged in the manufacturing and marketing of consumer products. Philip Morris International Inc. is an international tobacco company. Lorillard, Inc. is a manufacturer of cigarettes

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