Lorillard (LO) shares are up strongly today as it became known that an FDA advisory panel is likely to find that menthol does not increase the risk smokers face. “Menthol tobacco products may not increase smokers’ risk of disease more than other cigarettes,” according to a draft report from a Food and Drug Administration advisory panel, reported by the Wall Street Journal.
Covestor model manager James Hofmann has owned Lorrillard in his Dividend Growth model as a top holding. His comment on the ruling:
This is huge news and was holding down Lorillard’s stock until the release as over 90% of their revenue comes from their Menthol Newport brand. The stock is one of the biggest gainers on the S&P 500 today and I believe it's still very attractively priced.
"Menthol Doesn't Raise Smoker Risk, FDA Panel Says" Melissa Korn, Wall Street Journal 2/1/11
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