Investors often have trouble valuing conglomerates.
Frustrated shareholders sometimes end up calling for one or more businesses to be sold or spun off so the hot division can trade at a PE multiple commensurate with its growth. Culbro offers a great example of how such maneuvers can increase shareholder value. That company's top-selling Macanudo and Partagas premium cigar brands account for more than half of sales. The company also has a strong presence in mass-market cigars, including the Garcia y Vega, White Owl, and Tiparillo brands. Cigars have been popping up in public places with a perverse regularity that might have left even Freud puzzled.