Going Back To Philip Morris
My timing was off a bit with this stock, which I can surely acknowledge. However this is one company I think everyone needs to add to their portfolio, especially at this price. The fundamentals, and technicals, are right in line.
I was far too early to call this one on January 23, but the points I outlined in that post have thus far proven to be a big driver of success for Philip Morris. The supercharged emerging market play on a very popular product couldn’t be wrong. Neither can a 5% dividend yield.
I can see this stock going higher before the company releases its earnings on July 23. The weak dollar rally that the US stock markets have been thriving upon is going to really help Philip Morris, which only does business overseas. Its profits, when brought back to the US, are going to buy a lot more, and I can foresee an excellent quarter and even better forecasts from PMI.
I liked it at $35, I like it just as much at $43 and I’ll probably even like it at $50. The tailwinds behind this stock are simply too strong to ignore.
From a technical standpoint there are a few clouds in the sky, however. This stock does not handle an oversold RSI figure very well, and rarely trades out of the 30-70 range naturally set in any Wilder calculation. As such, a small consolidation here should be expected, though I’m looking for a bottoming formation on the $42 level before heading higher. The cup needs a handle, if you catch my drift.
Regardless of the technicals, this is one for the long haul. With the weak dollar coming back, this stock will only do better. And who can pass up a 5% yield? Not me, especially not with the opportunity for excellent capital gains.
