The Beat Report (01/08/2025) ~ Nicotine Pouches: The Trend You Can't Quit 🚭📈

January 8, 2025

Nicotine pouches are so trendy right now.

Tucker Carlson even has his own brand of them. Here's a video (that we found rather humorous) of him explaining why he started the business venture.

The cowboys aren't chewing tobacco anymore, and it's no longer socially acceptable for saloons to have spittoons.

It's all about being discrete now. Instead of smoking cigarettes, folks are vaping, and instead of chewing tobacco, folks are using nicotine pouches.

Philip Morris is completely dominating this brand-new market.

In 2022, they acquired Swedish Match, the inventor of ZYN, for $16B. This was one of the iconic company's largest acquisitions ever.

Last quarter, they sold nearly 150M cans of ZYN in the U.S., which is about 73% of the total market.

We think this trend is just beginning.

Philip Morris has rallied after 3 consecutive earnings events.

What's more, the price is holding above a shelf of former highs from 2017.

In other words, the risk versus reward is skewed in favor of the bulls at the current level.

This isn't a stock that will double in a few quarters but we still think there's an opportunity here.

If $PM is above 120, the path of least resistance is higher over the coming quarters.

Thank you for reading.

-Sam ❣️