Tobacco Industry Recent Strength

[Scottmi]

Not exactly legislation, but I was quite surprised to see recent Tobacco Industry market segment was the strongest current growth sector, with the following recent price changes:
Last 3 mo. +14.4%
Last 6 mo. +24.3%
Last 12 mo. +55.5%
(per Value Line May 2, 2025)
What's going on!?

 

[DesertDan]

That is interesting. I wonder how it breaks out between cigarettes, cigars and pipes.

 

[anotherbob]

Not exactly legislation, but I was quite surprised to see recent Tobacco Industry market segment was the strongest current growth sector, with the following recent price changes:
Last 3 mo. +14.4%
Last 6 mo. +24.3%
Last 12 mo. +55.5%
(per Value Line May 2, 2025)
What's going on!?

Who knows for sure. And which part of the industry? Are we talking globally or just certain geographic regions? It could be that the industry is moving into areas that didn't have as much of a commercial tobacco thing going on. It could be that there is more interest in tobacco and more people are taking interest in the hobby aspect of it. Could be a handful of members here really stocking up their cellars. Either way it's probably a mostly good thing for all of us.

 

[Sig]

It's because C&D charges so much for their Small Batch releases.

 

[Shore]

I think @woodsroad and/or @leonardw might have some insight...

 

[paulfg]

yeah but even growth of 55% of very little still isnt much

 

[Sigmund]

Is this growth in sales or growth in market value of the company?

If its the stock market growth varies due to a lot of different factors beyond actual growth as most of us consider it.

If its gross sales that makes a difference.
If its profit that is different than gross sales (they can just be ripping people off more effectively)

There are many ways to measure growth or market strength.

 

[sardonicus87]

Is this growth in sales or growth in market value of the company?

If its the stock market growth varies due to a lot of different factors beyond actual growth as most of us consider it.

If its gross sales that makes a difference.
If its profit that is different than gross sales (they can just be ripping people off more effectively)

There are many ways to measure growth or market strength.

Auto manufacturers pull this kind of thing all the time with their shareholders, the corporation forces dealerships to take stock they know the dealership can't move in order to look good on paper for moving units, screwing the dealerships in the process, so they can report and uptick for the quarter, meanwhile the dealership has to eat the cost and lose money, so they in turn try to screw their customers and end up tanking because they're trying to thread an impossible needle.

It's all smoke and mirrors to hide cloak and dagger.

 

[Briar Lee]

A bad omen.

My old law school estate planning professor was preaching during the Volcker Recession of 1980-3 (which was truly the worst until the Great Recession) that when really bad times come, people start sinning more, because sinning is cheap and is a diversion from a difficult present.

So sin stocks are a good hedge against bad times, better than gold and silver.

The economy of post war Germany was supported by cigarretes and booze for several years as currency, so he said stock up.

Governments are always fighting sin and sin always wins.

The Volcker Shock in the USA

Background Information The \"Volcker Shock\" refers to a series of monetary policy actions taken by…

thecuriouseconomist.com

During the Great Depression alcohol and tobacco sales boomed, along with peep shows and sin palaces and huge theaters.

At the same time shoe repair shops boom and there’s no lines at restaurants unless they are actually bars and honky tonks.

 

[geoffs]

Tobacco stocks are defensive and relatively insulated from tariffs. They are also investing in growth areas like "smokeless tobacco" (iQOS) and nicotine pouches. And the cigarette business is a huge cash cow, despite shrinking demand.
This has nothing to do with pipe tobacco or cigars. The only public company that has significant exposure to that area is STG, and the stock has not done well.

 

[sardonicus87]

That's another thing about growth, whether real or imagined, is speculative and also not a good indicator of anything. Long-term consistent growth is a metric worth looking at, but a 50% growth could be gone in less than a week.

The overall trends are far more important.

But, what growth are we even talking about here? Where's this coming from and how's it measured: stock values, pounds of raw product moved (tobacco is used in other things than just personal vice consumption), pounds of processed (for smoking, dip, snuff, etc) product moved, tobacco industry employment... what's the metric? Also, what's the benchmark... relative to other industries, relative to its past self, adjusted or not for inflation?

 

[BenMN]

They are also investing in growth areas like "smokeless tobacco" (iQOS) and nicotine pouches.

Yep, this. The wave of the future

And the cigarette business is a huge cash cow, despite shrinking demand

For sure

 

[LeafErikson]

Speaking of tobacco industry strength… I nearly spit out my coffee when I read this plug for STG by Simply Wall Street last week… Anyone in 2025 recommending you invest your hard-earned money into a publicly-traded tobacco company needs to be drug-tested immediately. Haha.

 

[Mike N]

View attachment 396049
Speaking of tobacco industry strength… I nearly spit out my coffee when I read this plug for STG by Simply Wall Street last week… Anyone in 2025 recommending you invest your hard-earned money into a publicly-traded tobacco company needs to be drug-tested immediately. Haha.

“Recovery potential lies in product innovation, cost control, and easing
operational disruptions.”

Hmmm. As far as the smaller pipe tobacco segment of the market is concerned, I think an argument can be made that Laudisi is out maneuvering STG on at least two of these three: innovation and easing operational disruptions.

The rebirth of GLP’s Drucquer & Sons blends was incredibly innovative, as is the recent importation to the US market of the HU and Gladora Pesse Canoe lines. And these are just two examples. Purchasing its own St. James Parish Perique farm surely would ease any market disruption of that tasty blending component. The interesting social media presence of Laudisi on YouTube and Instagram stands in stark contrast to the quarterly paper catalog full of codger aromatics I get in my mailbox from STG’s Pipes & Cigars.

Sykes and company continue to get it done for pipe smokers.

 

[VDL_Piper]

Some market intelligence

Global Tobacco Market Size, Share, Trend, Forecast to 2033

Global Tobacco Market Size is anticipated to exceed USD 1100.9 Billion by 2033, Growing at a CAGR of 2.01% from 2023 to 2033.

www.sphericalinsights.com

 

[LeafErikson]

“Recovery potential lies in product innovation, cost control, and easing
operational disruptions.”

Hmmm. As far as the smaller pipe tobacco segment of the market is concerned, I think an argument can be made that Laudisi is out maneuvering STG on at least two of these three: innovation and easing operational disruptions.

The rebirth of GLP’s Drucquer & Sons blends was incredibly innovative, as is the recent importation to the US market of the HU and Gladora Pesse Canoe lines. And these are just two examples. Purchasing its own St. James Parish Perique farm surely would ease any market disruption of that tasty blending component. The interesting social media presence of Laudisi on YouTube and Instagram stands in stark contrast to the quarterly paper catalog full of codger aromatics I get in my mailbox from STG’s Pipes & Cigars.

Sykes and company continue to get it done for pipe smokers.

Laudisi is not a publicly traded company but yes I agree with you. Laudisi is killing the game right now.

 

[Chasing Embers]

stands in stark contrast to the quarterly paper catalog full of codger aromatics I get in my mailbox from STG’s Pipes & Cigars.

Aromatics are the cash cow of pipe tobacco, without them the entire market would fall. They make up 80-90% of pipe tobacco sold.

 

[Mike N]

Aromatics are the cash cow of pipe tobacco, without them the entire market would fall. They make up 80-90% of pipe tobacco sold.

I'm not sure if the "entire market would fail," but I do agree that if aromatics were banned there would be a lot of us codgers calling their congressmen.

 

[ThermionicScott]

View attachment 396049
Speaking of tobacco industry strength… I nearly spit out my coffee when I read this plug for STG by Simply Wall Street last week… Anyone in 2025 recommending you invest your hard-earned money into a publicly-traded tobacco company needs to be drug-tested immediately. Haha.

Warren Buffett used to call dying companies from which a little more profit could still be extracted, “cigar butts.”

 

[Mike N]

Warren Buffett used to call dying companies from which a little more profit could still be extracted, “cigar butts.”

Yep, and there is also this quote from Buffet when he invested in RJR Reynolds:

"I'll tell you why I like the cigarette business," he said. "It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."