2-Star Stocks Poised to Plunge: Vector Group?
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cigarette manufacturer Vector Group (NYS: VGR) has received a distressing two-star ranking.
With that in mind, let's take a closer look at Vector's business and see what CAPS investors are saying about the stock right now.
Vector facts
Headquarters (Founded) | Miami (1873) |
Market Cap | $1.4 billion |
Industry | Tobacco |
Trailing-12-Month Revenue | $580.7 million |
Management | CEO Howard Lorber |
Return on Capital (Average, Past 3 Years) | 21.5% |
Cash/Debt | $276.9 million / $540.3 million |
Dividend Yield | 9.3% |
Competitors | Lorillard |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 10% of the 77 All-Star members who have rated Vector believe the stock will underperform the S&P 500 going forward.
Just yesterday, one of those Fools, TerryHogan, succinctly summed up the Vector bear case for our community:
1. Dividend looks unsustainable. 2. They're not "sticking to their knitting" -- see hedge fund and real estate investments. 3. Don't like the cigarette business long-term (Altria notwithstanding). 4. If you're going to be in cigarettes, be in a good brand, and be in China. 5. Huge debt balloon due in 2015, and the rates on it are ridiculous (11%!) 6. Declining revenue, with no concomitant reduction in administrative expense.
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The article 2-Star Stocks Poised to Plunge: Vector Group? originally appeared on Fool.com.
Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.
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