Look at this 1 year chart of AOI compared to UVV MO RAI PMI and you'll see it has done very well.

http://finance.yahoo.com/q/bc?t=1y&s=AOI...

But whenever you get a crisis brewing, and right now that crisis is a decline in cigarette volume reported by philip morris, investors get worried about AOI because:

1) No dividend. None of this "I'm getting paid 5% while we wait for an upturn."

2) Lots of debt and that debt service is a 10% rate. How much margin compression can AOI tolerate and still make a profit?

But the funny thing is that AOI sold less tobacco last year than the year before. Volumes were off about 10% yet AOI was able to make a $1.50 in profit per share. They did better, but sold less volume.

There are some structural issues out there which will keep tobacco leaf prices high for some time. Take China, they have 15% of the world's population but only 7% of the world's farmland. Yet they need to service a growing population of smokers. Every acre devoted to tobacco is taken away from food production.

And what happens if the FDA wants to keep tabs on how tobacco is grown and treated? AOI and UVV will be able fulfill any requirements because they are "full service" and have taken an active role in how the tobacco is produced but what about the smaller outfits that do not perform full service?

It's a BRAVE NEW WORLD out there for the leaf dealers, but so far, both AOI and UVV have been able to navigate it successfully.