Smoking Big Tobacco Stocks

Consumer Staples are rarely where we find strength in bull markets. That’s a feature, not a bug. 

In healthy market environments, capital flows toward higher growth and higher beta areas, while defensive groups with steady cash flows get left behind. 

But even within Staples, idiosyncratic leadership can and does emerge.

A few cycles ago, energy drink stocks like MNST, FIZZ, and CELH were among the best-performing stocks year after year. They delivered massive outperformance despite operating in a traditionally sleepy sector.

We’re seeing something similar with tobacco stocks today. 

After years of relative underperformance, these stocks are waking up.

Here’s our Big Tobacco Index printing fresh all-time highs, breaking out of a decade-long base: 

What makes this setup even more compelling is the carry. 

These stocks offer yields in the five percent range. So not only are they trending higher and threatening major breakouts, but they are also paying investors for the wait time. 

That combination is even more appealing.

Here is how we are approaching the Big Tobacco breakout.

Our first setup today is the $281.5B giant Philip Morris International $PM: 

Philip Morris has been stair-stepping higher after breaking out of a massive base in late 2024. 

We already traded PM successfully through Breakout Multiplier earlier this year.

Now, we are looking to build exposure through common stock as this theme enters what could be a much larger phase.

Price has since consolidated those gains, hovering around a key level near 165. 

As long as PM remains above 165, the uptrend remains intact and we want to be long targeting 223. 

If you want to see our other thematic trades in tobacco, join ASC Premium risk-free today.