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Star Scientific, AŞ Message Board

  • ad7777777777 ad7777777777 Jun 23, 2010 4:13 PM Flag

    New Taxes May Hurt Big Tobacco, but this Stock is a Winner

    Action to Take --> Tobacco stocks have always been praised for the high levels of cash flow, impressive dividend yields, and seemingly endless supply of consumers that choose to keep consuming tobacco. But with every passing price increase, an increasing number of consumers will decide that their wallets can no longer take such a deep monthly hit. At some point, unit volume declines will be even greater than the serial price increases these firms can pass through. That’s when sales and profits will start to materially shrink, dragging share prices down with them.

    Investors willing to invest in small, speculative companies may want to look at Star Scientific (Nasdaq: CIGX), which has developed a process that removes many harmful chemicals that are often introduced in the curing process. The company has also developed a smoking-cessation product that is aimed at slowly weaning tobacco consumers from any nicotine addiction. To date, the company has not yet generated a meaningful base of revenues.

 
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