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New trade – Lorillard, Inc. (LO)

Today I added Lorillard, Inc.(LO) shares into my portfolio. It pays nice dividend with 23% dividend growth, 4 year dividend increase history and 21% annual expected return growth. My calculated fair value is at 41.33 a share and Morningstar lists their fair value at 41 a share. Their analysis expect better and more aggressive growth due to menthol and flavored cigarettes market where Lorillard dominates. The only risk this company is facing is EPA menthol market regulation, which is however highly unlikely due to mainly large tax impact (10 billion in taxes) to federal budget. I liked what I could read about this company, which currently undergo a 3:1 split (which may create another capital gain potential in the long run). From the technical analysis the stock is trading bellow 200 day MA but at 50 day MA support with narrow Bollinger Bands (the price break is imminent; the only question is which direction; and I believe it will be upside).

01/30/2013 10:40:00 Bought 25 LO @ 39.64

Total shares held as of today: 25
Estimated annual dividend: $51.75
Consecutive Dividend Increase: 4 years
Dividend yield today: 5.21%
Dividend 5yr Growth: 23.33%
Dividend paid since: 2008

4 responses to “New trade – Lorillard, Inc. (LO)”

  1. admin says:

    Marvin, I like Lorillard stock a lot now after I read a lot about it. If everything stays as is (mainly the governmental regulation), this stock should perform well.

  2. Awesome buy. I love the tobacco industry, especially outside the US

  3. admin says:

    AAI, I liked the LO story and performance, so I decided to add this company into my portfolio. Thanks for stopping by.

  4. AAI says:

    Nice Buy. I picked up some LO last year and have a sold put against it also. I hope to buy more this year as soon as I get my MO and PM positions up a little. You have to love the dividend and the move into e-cigs. Good luck!

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