On tonight’s MAD MONEY on CNBC, Jim Cramer discussed Altria Group, Inc. (NYSE: MO) and its soon to be break-up where Philip Morris International (NYSE: PM) will be on its own. It sounded like he was going to pick one over the other, but he likes both of them with Altria as the large cap value stock and a high yield with major buybacks coming, and he likes "PMI" as an international large cap growth stock that will still get to be an S&P 500 Index member.
Cramer said he thinks these combined will go to $100.00. We recently covered the break-up in our Special Situation Investing Newsletter with some of the same reasoning, but with a more conservative target. Our target was more conservative than Cramer’s as we gave this a potential $85.00 target on a combined basis and $78 to $81 on a near-term basis. The difference was that when we gave the target and call the stock market was acting only like a bear market and we hadn’t gotten any bailouts yet.
We’ll revisit our target now that it seems like much has stabilized, although we still tend to be more conservative on targets. We’ve also been covering this one on our open email distribution list as well.
Jon C. Ogg
March 27, 2008
Jon Ogg produces the Special Situation Investing Newsletter and can be reached at email@example.com; he does not own securities in the companies he covers.