< The 2014 All-America Research TeamBonnie HerzogWells Fargo SecuritiesFirst-place appearances: 0
Total appearances: 10
Team debut: 2001Wells Fargo Securities researcher Bonnie Herzog advances from third place to second, the position she most recently earned in 2007. “Very bullish” on the electronic cigarettes market, as she describes herself, Herzog in May published a report explaining that Richmond, Virginia–based Altria Group, parent company of Philip Morris USA, has the most to lose from the growing popularity of the vapor devices — and that it therefore merited a downgrade from buy to neutral, at $39.75. The shares had traded up to $44.27 by mid-September, but the analyst takes a long view. By 2023, she forecasts, Altria’s combined volume share will be just 32 percent, down from 47 percent today. On the other hand, she believes that Greensboro, North Carolina’s Lorillard, as a smaller player, has the most to gain from the industry’s transformation. Herzog has long been a fan of the U.S.’s No. 3 cigarette maker, which manufactures the leading traditional menthol cigarette, Newport, and owns the best-selling Blu eCig brand. In July, Lorillard’s management announced that the company had agreed to be acquired by the nation’s No. 2 manufacturer, Reynolds American of Winston-Salem, North Carolina, for $68.88 per share, or $27.4 billion. Herzog is cautiously optimistic that, if the deal is approved, it will benefit shareholders of both companies and result in a stronger competitor to No. 1 Altria.