TOBACCO INDUSTRY
BAT in slight recovery after 22% fall since January
The problem centres on valuation and sentiment, says an analyst
British American Tobacco’s (BAT’s) share price recovered slightly on Tuesday after dropping as much as 22% since January, largely spooked by the global derating of tobacco companies and rival Philip Morris’s poor financial performance. Philip Morris’s share price plunged as much as 18% on Friday last week after its latest earnings report showed that $4.5bn spent on four new products was failing to win over new customers, according to a Bloomberg report. "The problem with this business is primarily centred around valuation and sentiment," Gryphon Asset Managers portfolio manager Casparus Treurnicht said. It is not just on the local bourse but also on the London Stock Exchange, where BAT has its primary listing, that the share price has dropped. The share price has been trading in the lower echelons of its range, having reached what the Nasdaq flagged recently as "oversold". This is when a stock falls below 30 on the Relative Strength Index (RSI), a technical indicator tool used to me...
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