I Love You, Altria Group!

With shares of Altria Group Inc. (NYSE:MO) trading at around $33.70, is MO an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

CigaretteC = Catalyst for the Stock’s Movement

If you have owned shares in Altria Group over the past three years, then you can relate to the title. You have enjoyed a gain over 100 percent over a three-year time frame while also receiving healthy dividend payments. Life doesn’t get much better when it comes to investing. However, while past results might be a good indicator for the odds of future success, there are no guarantees.

Altria recently reported Q4 results. EPS came in at $0.55, which was a 34.1 percent increase year-over-year. Atria has displayed pricing power and continued to gain market share. Prices for all cigarette brands were raised by 6 cents per pack. There has also been a higher equity investment in SABMiller.

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FY2012 EPS came in at $2.06, which was a 25.6 percent increase over last year. Guidance for FY2013 was $2.34 to $2.40. We will focus on guidance in the Trends section as they strongly relate to one another for this story.

Altria has made significant progress with its cost reduction program with a reduced headcount, consolidation of facilities, and improved business processes. The goal of $400 million in annualized savings seems attainable.

Let’s take a look at some important numbers for Altria Group prior to forming an opinion on the likelihood of the stock’s direction…

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