Research Note: Altria Group (MO)

Oct. 30, 2007 –7:54pm EST

NEW YORK—As the US economy heads towards a slowdown and possible recession, investors may want to consider a recession proof stock such as Altira Group (MO), or better known as Phillip Morris.

As the economy slows down people tend to drink, smoke, and eat more, and Altria Group may be well positioned to provide for some stability for ones portfolio.

Recent indicators point to an increasing meltdown in the housing market and prices, and a drop in consumer confidence, all before the upcoming holiday season. Financial stocks have taken it on the chin over the past several months, and this may begin to spill over into the overall US job market.

As US and emerging markets unwind we would expect money to search for a safe haven to ride out the storm, and Altria Group may provide that means.

Altria Group provides not only a strong product diversification in the consumer staple sector, but strong revenue growth and international exposure as well. The company also offers income for investors with a $3.00, or 4.1% dividend yield, which should provide for an attractive floor for the stock.

PMI SPIN OFF

Another factor investors should consider when reviewing MO as a safe haven during any possible recession, is their forecasted spin off of Phillip Morris International sometime in the next few months. This potential stock dividend should attract strong interest from the investment community, as did their spin off of Kraft Foods in March 2007.

It’s in Ludlow Capital’s opinion that Altria Group (MO) provides for a safe and stable stock in these uncertain economic times, and has a price target of $85 by years end.

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