Out Fox The $treet

Summary Lorillard and Reynolds American merger approaches FTC decision. Lorillard hit new highs over $70 this week. With a high PE multiple, the downside risk appears to far outweigh any benefits from holding the stock to collect the merger discount. After years of owning Lorillard (NYSE: LO ) and benefiting from high dividends and stock buybacks, the recent stock action presented the opportunity to exit the stock. In addition, the current stock price faces risks from any issues with the Federal Trade Commission blocking the Reynolds American (NYSE: RAI ) merger or requiring further divestitures beyond those already proposed in the transaction. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

The cigarette stocks remain hot as high yields and steady growth have led to strong stock gains. Many an investor has overlooked the sector due to perceived negatives of the industry, but for an investor looking for yields and growth the sector should not be ignored. Right now the leading domestic cigarette stocks of Altria (NYSE: MO ) , Lorillard (NYSE: LO ) , and Reynolds America (NYSE: RAI ) all maintain dividend yields of more » Disclosure: Long LO. Please review the disclaimer page for more details.