Two Of The Best Reasons To Buy British American Tobacco plc Today

Investors in British American Tobacco have seen their shares and their dividend payouts double in value since August 2007, during which time the FTSE 100 has gained just 6%.
This kind of performance is impressive by any standards, but is especially good given that the tobacco industry is supposed to be in a long-term decline — so what’s going on?

The world’s most profitable industry?

One of the benefits of selling a mature product like cigarettes is that you don’t have to spend much money on R&D. Your customers are already addicted, and do not want or expect anything to change.
BAT owns several of the world’s biggest cigarette brands, and smokers in emerging markets will pay a premium for these brands, allowing BAT to take market share from local brands, without sacrificing pricing power — the holy grail of profitability.
During the first six months of this year, BAT’s operating margin rose to 37%, up from 35.3% last year. The firm targets a 0.5-1.0% increase in operating margin each year, and margin growth, coupled with share buybacks, have enabled BAT’s earnings per share to rise steadily, despite falling volumes.
Of course, the process of extracting more profit from fewer sales will reach a limit eventually, but BAT sold 694bn cigarettes last year, so I don’t think it’s anywhere near the limit yet.

A replacement for tobacco?

Electronic cigarettes — also known as vaporisers — have become increasingly popular in western markets over the last few years.
To be honest, I didn’t realise just how popular they had become until I saw a statistic in the Financial Times last week, suggesting that 10% of the UK’s 10m smokers now like to ‘vape’ — inhale nicotine vapour from an electronic cigarette.
BAT has been investing in electronic cigarettes for some time, and has recently launched its own product, Vype, into the UK market.
Vaping is no less addictive than smoking, and currently has none of the troublesome regulatory restrictions that apply to selling cigarettes and smoking. You can, for example, sit inside a pub and vape, quite legally.
I’ve got a feeling that this could become a very big market indeed.

BAT shares are still a buy

Despite their fantastic run over the last decade, I believe that British American Tobacco shares still have further to run, especially in terms of income growth.
I’m not alone, either. One of the most successful UK fund managers of the last two decades, Neil Woodford, has stayed loyal to the tobacco sector despite its outperformance.
Indeed, if you’d invested £10,000 into Mr Woodford’s High Income fund in 1988, it would have been worth £193,000 at the end of 2012 — a 1,830% increase!
British American Tobacco is one of Neil Woodford’s largest holdings. If you’d like access to an exclusive Fool report about Mr Woodford’s eight largest holdings, then I recommend you click here to download this free report, while it’s still available.

A very specific group of brain cells may be a target in nicotine withdrawal therapy

Nicotine withdrawal might take over your body, but it doesn't take over your brain. The symptoms of nicotine withdrawal are driven by a very specific group of neurons within a very specific brain region, according to a report in Current Biology, a Cell Press publication. Although caution is warranted, the researchers say, the findings in mice suggest that therapies directed at this group of neurons might one day help people quit smoking.Gauloises cigarettes.
"We were surprised to find that one population of neurons within a single brain region could actually control physical nicotine withdrawal behaviors," says Andrew Tapper of the Brudnick Neuropsychiatric Research Institute at the University of Massachusetts Medical School.
Tapper and his colleagues first obtained mice addicted to nicotine by delivering the drug to mice in their water for a period of 6 weeks. Then they took the nicotine away. The mice started scratching and shaking in the way a dog does when it is wet. Close examination of the animals' brains revealed abnormally increased activity in neurons within a single region known as the interpeduncular nucleus.Esse cigarettes.
When the researchers artificially activated those neurons with light, animals showed behaviors that looked like nicotine withdrawal, whether they had been exposed to the drug or not. The reverse was also true: treatments that lowered activity in those neurons alleviated nicotine withdrawal symptoms.
That the interpeduncular nucleus might play such a role in withdrawal from nicotine makes sense because the region receives connections from other areas of the brain involved in nicotine use and response, as well as feelings of anxiety. The interpeduncular nucleus is also densely packed with nicotinic acetylcholine receptors that are the molecular targets of nicotine.
It is much less clear whether the findings related to nicotine will be relevant to other forms of addiction, but there are some hints that they may.
"Smoking is highly prevalent in people with other substance-use disorders, suggesting a potential interaction between nicotine and other drugs of abuse," Tapper says. "In addition, naturally occurring mutations in genes encoding the nicotinic receptor subunits that are found in the interpeduncular nucleus have been associated with drug and alcohol dependence."

Total smoking ban considered

Currently there is a smoke free zone 10 metres around Craigavon and Daisy Hill Hospitals and within its buildings.
However patients, visitors and staff are permitted to smoke outside that zone.
The Western Trust plans to completely ban smoking anywhere on its grounds including buildings, entrances, pavements and car parks. It will include everyone including patients, service users, staff, member of the public and contracted workers.
This is a step further than the previous Western Trust policy as there will be no shelter where patients can smoke and staff will not be allowed to smoke in their cars on site.
When asked by the Mail if the trust planned a similar move, a spokesperson said: “The trust will be reviewing Its Smoke free policy in the coming year and considering future plans to extend smoke free areas on health and social care grounds.
“The trust’s current policy is smoke free buildings and a smoke free zone of 10 metres around Craigavon and Daisy Hill hospital buildings,” said the spokesperson.
Western Trust chief executive Elaine Way said: “The health of our patients and staff is a top priority for the trust.”

Twins study shows smoking ages your face faster

Here's something to think about the next time you put a cigarette to your lips: The skin around those lips is going to look older, faster.
You're also more likely to get bags under your eyes sooner. And jowls. And more wrinkles around those lips.Pall Mall cigarettes.
Researchers in Ohio studied the physical differences between the faces of nonsmokers and their twins who smoked and found confirmation of a long-held belief: Smoking does indeed age you.
The study, by researchers at the Department of Plastic Surgery at Case Western Reserve University, looked at 79 sets of twins between the ages of 18 and 78 at the annual August gathering of twins in Twinsburg, Ohio. Each person had his or her picture taken by a professional photographer.
The photos were divided into two categories. The first group was 45 sets of twins in which one smoked and the other didn't. The other group was made up of smokers, but in each set, one twin had smoked at least five years longer than the other.
Two doctors and a medical student studied photographs of the twins and assigned scores to their facial features.
In the case of the first group, the judges said the smoking twin appeared older 57% of the time.
For the second set, the longer-smoking twin looked older more than 63% of the time, meaning the aging differences could set in after just five years.
"This study confirms some of what was believed in the most scientific way possible," said Dr. Bahman Guyuron, who led the research. "With longer follow-up, we believe that every smoking twin might have exhibited a difference in aging."
The study looked at other aging factors -- alcohol consumption, stress and sunscreen use, for instance -- and found they were similar in these sets of twins.
"Smoking reduces the collagen formation, results in collagen degradation and reduces the skin circulation," Guyuron said. "Additionally, nicotine reduces the skin thickness. All of these reduce skin elasticity and (cause) premature aging."
The study was published in the journal Plastic and Reconstructive Surgery.

Smoking is more deadly than thought: study

Smoking is much more deadly than previously thought.
A study of 200,000 Australians shows the habit cuts 10 years off the average smoker's life and is directly linked to two thirds of deaths in current smokers.
This is much higher than previous international estimates of 50 per cent.
The four-year analysis of health records in the Sax Institute's 45 and Up Study shows even moderate smoking is a major killer.
"We all know that smoking is bad for your health. But until now we haven't had direct large-scale evidence from Australia about just how bad it is," says study leader Professor Emily Banks, the scientific director of the 45 and Up study.
"We've been relying on evidence from other countries."
The study, supported by the National Heart Foundation in collaboration with Cancer Council NSW, shows risk increases with the number of cigarettes smoked a day.
The risk of death is doubled even among those smoking an average of 10 cigarettes a day, says study co-author Associate Professor Freddy Sitas from Cancer Council NSW.
The good news, says Prof Banks, is that stopping smoking at any age reduces the risk.
Smoking is the largest single preventable cause of death in Australia and kills 15,000 people a year, says the Heart Foundation's Dr Rob Grenfell, who worked on the study.
"People need to realise that smoking is a dangerous activity," he said.
"There's no safe level of smoking and there's no such thing as social smoking."