The improving political environment can help Altria

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As a value investor, one industry that has caught my attention for quite some time was the tobacco industry. While I feel that tobacco is a dying industry, with the rise of e-cigarettes, the industry seems to be growing again. With the cheap valuations of many of the tobacco names like Altria (NYSE: MO), Philip Morris (NYSE: PM), and British American Tobacco (NYSE: BTI) as well as the stable revenue many of these companies have and the high dividend yields, many of those stocks looked appetizing for my portfolio. 

With the political pressure deterring investors from the industry, one company that took the worst beating of all was Altria. Despite being able to capitalize on the e-cigarette market through its investment in Juul as well as diversifying into cannabis by investing in Cronos Group, Altria's losses accelerated. Altria's stake in Juul went sour and with the cannabis industry taking a beating from an oversupply problem, Altria lost an additional $731 million in unrealized losses from its stake in Cronos Group. 

Altria has taken quite a lot of drawbacks. 

But, here's where things get better

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The tobacco industry has received tons of distaste from the government for selling products that kill people. With cigarettes being produced with tons of harmful chemicals, smokers have been exposed to those chemicals have experienced severe health problems. To deter customers from buying cigarettes, the government has been raising taxes on cigarettes for years. Because of the addiction, tobacco companies still reel in cash. 

Democrat Bernie Sanders, who holds negative views on the tobacco industry, recently dropped out of the presidential race, leaving Joe Biden and Donald Trump to face in the main election. Because Joe Biden and Donald Trump haven't expressed strong negativity against the tobacco industry, this shows that the political environment for Big Tobacco is getting better. 

Conclusion

While Juul might be a massive loss for Altria, with the potential for the political climate to get better, Altria's main source of revenue will continue to receive support. Also, with Altria's stake in Cronos Group, there is a chance for Altria to capitalize on the growth of the cannabis industry, helping Altria return to growth once again. 

I rarely talk about investing in sin but this happens to be my second time doing it. 

Invest wisely.