Philip Morris International (PM) Pulled Back in Q3

The London Company, an investment management company, released “The London Company Income Equity Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities continued their rally in the third quarter, driven by the Fed rate cut, solid corporate earnings, and enthusiasm around AI. In the third quarter, the portfolio appreciated 6.0% gross (5.8% net) compared to a 5.3% increase in the Russell 1000 Value Index. Positive stock section led the outperformance of the portfolio in the quarter, but was partially offset by sector exposure headwinds. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its third-quarter 2025 investor letter, The London Company Income Equity Strategy highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) is a tobacco company that offers cigarettes and smoke-free products. The one-month return of Philip Morris International Inc. (NYSE:PM) was -4.90%, and its shares gained 17.84% of their value over the last 52 weeks. On November 4, 2025, Philip Morris International Inc. (NYSE:PM) stock closed at $147.66 per share, with a market capitalization of $229.853 billion.

The London Company Income Equity Strategy stated the following regarding Philip Morris International Inc. (NYSE:PM) in its third quarter 2025 investor letter:

"Philip Morris International Inc. (NYSE:PM) – After a strong start to the year, PM shares pulled back during the quarter. Its smoke free offerings continue to grow. IQOS continues to convert smokers and ZYN’s momentum was further supported by capacity additions. Margins are higher on smoke-free products. The stable combustibles business and robust smoke-free growth will drive significant, sustainable free cash flow over the long term."

Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 111 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the second quarter, up from 104 in the previous quarter.  While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Philip Morris International Inc. (NYSE:PM) and shared billionaire Daniel Sundheim’s stocks picks with huge upside potential. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.