Tobacco stocks lose big
“Big tobacco” company Philip Morris’ stock recently registered it’s biggest drop in a decade, plummeting 18% on April 19th. The sharp decline came on the back of news that the cigarette giant’s newest ploy to hook another generation on nicotine — a heat-not-burn tobacco device they call iQor, which heats a tobacco plug instead of lighting it on fire — fell far short of sales projections.
The new iQor product, and several other new attempts at taking tobacco beyond the cigarette, are being brought to market as the smoking industry finds itself struggling to attract new customers…and as their loyal, longtime customers die by the millions due to lung cancer, heart disease and other smoking-induced diseases.
Global smoking statistics are gut-wrenching:
- Tobacco kills up to half of its users.
- Tobacco kills more than 7 million people each year. More than 6 million of those deaths are the result of direct tobacco use while around 890 000 are the result of non-smokers being exposed to second-hand smoke.
- Around 80% of the world’s 1.1 billion smokers live in low- and middle-income countries
- (source: World Health Organization )
Investors hooked on tobacco (stocks)
And yet, investors seem to have no qualms about profiting from the death of millions as tobacco stocks remain among the biggest holdings of some of the largest mutual funds and ETFs in the world. A quick survey of the most popular smoke stocks show companies like Vanguard, American Funds, SPDRs/State Street, DFA Funds, T. Rowe Price, TIAA CREF, iShares, Fidelity and others as their biggest investors.
Click below to see a list of the biggest investors in these three tobacco stocks:
Tobacco stocks wise stewardship?
Some investors justify their investment in tobacco companies with the excuse that excluding them from a portfolio might not be “wise stewardship” because their returns might suffer.
I’m sorry, but give me a break.
Since when did “wise stewardship” include profiting from the sale of an intentionally addictive product that kills half the people that use it? Do we really care more about our profits than people?
And for Christian investors, we should be very aware that an investment in tobacco companies runs counter to Jesus’ command to “love your neighbor as yourself”. If you love your neighbor, you don’t sell them cigarettes.
Christians quit tobacco stocks
Thankfully, despite tobacco stocks continuing to be embraced by some of the largest mutual funds, ETFs, pension funds and other investors, there are a growing number of investors who are kicking the tobacco stock habit and creating demand for tobacco-free investments. For example, the biblically responsible investing movement is adding to that trend as more and more Christians are realizing that they can align their investments with their biblical values.
Additionally, research from major universities such as Oxford, Wharton and Biola are finding that investing with a values based approach does not require a sacrifice of performance. And if the recent stock price struggles of big tobacco are any indication, investors might consider making a “wise stewardship” decision and purge their portfolios of tobacco faster than you can strike a match.
Will you kick the habit?
Robert Netzly is the CEO of Inspire Investing and frequent contributor on FOX, Bloomberg, New York Times and other major media. Read more from Robert in his #1 bestselling book Biblically Responsible Investing, available at Amazon.com and other major retailers.
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Advisory Services are offered through CWM Advisors, LLC dba Inspire, a Registered Investment Adviser with the SEC.