Are Investors Missing Altria's (MO) International Business?

Shares of Altria (NYSE: MO) have fallen as much as $1.33, or 5.9%, to an intraday low of $21.20 after closing the day at $22.53 yesterday. After reporting in-line Q1 earnings yesterday after the close, investors are selling the stock today as the cigarette maker announced its total tobacco volumes fell about 1.2% over the quarter. Additionally, Altria said it expects volumes to decline about 3% over 2008. Could Altria be regretting its divorce from its international partner, Philip Morris International (NYSE: PM)?

Today's downside marks the largest drop in Altria's share price in quite some time; With a beta of about 0.85, Altria shares are less volatile than the broader markets. Wall Street often considers Altria a defensive play as cigarette smokers will likely not stop smoking even if the economy is heading downward, thus shares rarely move sharply lower even if the Dow has a triple digit loss.

Possibly adding to today's decline, Goldman Sachs removed Altria from its Conviction Buy list, which highlights stocks the firm believes will outperform in the near-term. Goldman has kept a Buy rating on Altria.

Philip Morris International, which was spun-off of Altria on March 31, is also trading lower today. PMI last traded at $51.14, which is down about $0.85, or 1.6% from yesterday's closing price. In the 19 days of trading since being separated, shares of Altria and Philip Morris International have stayed relatively flat: MO is down about 3% while PM is up 1%. [BCS]

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