Woodford: I am still backing tobacco despite regulation fears

Invesco Perpetual's Neil Woodford said he is sticking by his significant weighting to tobacco stocks despite concerns over earnings momentum and new packaging rules putting pressure on share prices.

Woodford (pictured), speaking as his £1bn Edinburgh Investment trust announced its half-yearly report, argued tobacco stocks are still yet to be valued appropriately by the market and could re-rate significantly in the coming years. The stocks' stellar performance in recent years and fears over the impact of new regulation has prompted recent share price declines as a number of managers sell down their holdings in the sector, including PSigma's Bill Mott and Liontrust's Stephen Bailey. Australia, a key market for cigarette manufacturers, is bringing in plain packaging rules in Decembe...