Lorillard (NYSE:LO) is about to release earnings. Ponder this Bear Case Scenario:
Lorillard generates roughly 90% of its revenue from Newport, leaving it highly undiversified and vulnerable to any negative regulatory developments in the menthol category.
Lorillard has sold its international rights to Newport and does not participate in any foreign growth. The money in cigarettes is over seas.
If consumer tastes shift from Methanol Lorillard is in very deep trouble.
George Gutowski writes from a caveat emptor perspective.