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Star Scientific, Inc. (CIGX) Message Board

  • jerhipaz jerhipaz Jan 15, 2013 11:08 AM Flag

    How see Star Scientific's stock

    I invest for a living and I might add successfully. I have to say that this stock is as tough as any I’ve been heavily involved with in the past 35 years. The story is a “change of life” story (not just the product, the stock) and all the work I’ve done shows “IT CHECKS OUT.” Yet the direction of the stock’s price remains in the hands of the shorts. This continues even as institutional ownership keeps rising to one record level after another. Another compelling sign is that “Insider” ownership keeps rising and no one sells – an incredibly strong sign. There are a million reasons for an insider to sell, there is only one reason to buy more.
    The story today is infinitely better today than it was over a year ago in mid 2011, when the stock reached $5 a share. Then we had big “hopes” today we have facts, data, testimonials, proof of concept – from ambassadors, the Roskamp Institute, Johns Hopkins, GNC,( dare I say Harvard Medical School?), the Number One Endocrinologist in the country and endless friends, neighbors and family members who are living, breathing proofs that something amazing is happening.
    So why do the shorts rule the day? I have a few answers.
    First, historically betting against “biotech” is usually a good bet, most companies never end up with a commercial product and all take longer and spend more money than anticipated.
    Second, the shorts were betting against a huge tobacco settlement from Reynolds. They have a short term victory on this, but the company isn’t the same company it was when they made the bet (Anatabloc), AND, the tobacco science has been proven and the ownership confirmed by the USPO and the federal courts. Someday someone will pay substantial amounts for this essential science, and it may be to a separate entity which we will own off of the Star/Rock Creek balance sheet. (Read spinoff.)
    Third, the shorts thought they could put the firm under with endless legal challenges while the company was bled dry. Well, the legal efforts are over now, expenses are substantially reduced, Anatabloc is cash flow positive and there is $30 million in the bank which will last far beyond break even.
    Finally, the short position is big and it’s hard to cover especially when the shorts can still control the price. One reason for this is that the company still doesn’t have conventional Wall Street research. That is changing. The Hopkins study gives Star new credibility and as the company forges new relations with other biotechs (one was just announced) and Big Pharma, their investment bankers and researchers will learn of Star and Anatabloc and start coverage. (One hears that some of Reynolds research coverage analysts are already taking Anatabloc and were anxious to get their biotech analysts to cover Star.)
    So this is my take. Stay away from buying calls, go easy on the margin, don’t buy more than you can afford and stay the course. This stock has a history of up-side surprises and dramatic price increases, it has a powerful and savvy board of directors, it has relationships with some of the medical communities finest institutions, it has many hundreds (thousands?) of devoted consumers and sales are growing at an alarming pacer. When we see diabetes and thyroid suffers added to the mix, we will no longer be a single digit stock, and some of us expect a whole lot more.

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    • If you've invested here of late, this one must the rare lump of coal in your portfolio. Then again, someone with "successful investing experience of 35 years" never would have touched this. Hmmm. I say Balderdash! Mr. P

    • Why do you suggest to stay away from buying calls. I have some January 2014 $4 calls

    • One of the best posts I've seen on this board. Too bad I do not know you better, I would introduce you to some of the PIPES I am doing. Have a good day.

      Sentiment: Strong Buy

    • STSI has the potential to revolutionize the industry.
      by cisum1692003 . Jan 15, 2013 5:20 PM . Permalink

      8:04a ET January 11, 2013 (PR NewsWire)

      Star Scientific (NASDAQ: STSI) has a market cap of $444 million and is involved in the manufacture, distribution, and sale of consumer products, dietary supplements, and dissolvable tobacco. The company has a bunch of mega-cap competitors with Philip Morris (NYSE: PM) (market cap $144bln), Altria (NYSE: MO) ($65bln), Reynolds American (NYSE: RAI) ($24bln) and Lorillard (NYSE: LO) ($15.26bln). Star Scientific announced a couple of months back that it was getting out of the smokeless tobacco business and focusing instead on hawking dietary supplements. The stock dropped to a 52-week low in November of $1.56, but has seen a significant rise and is currently trading at $2.65 (52-week range is $1.56 - $5.05). This coincidentally matches the same time when institutional funds began completing 13F filings. In the latest filing, net institutional purchases totaled approximately 13 million shares. This represents roughly 9.3% of the company's current float of 140 million shares. On December 14th the stock had a short Interest of 29.5 million, close to an all-time high and representing about 18% of the 165.8 million shares outstanding.

      The stock has seen a plethora of institutional buying and a fast appreciation in price from November's low. In the past, much of the company's performance was based on its success winning lawsuits against the major tobacco companies for product infringement. Now, there are other catalysts expected to drive the stock within the next few weeks. In the near future there is going to be a release of the Johns Hopkins Third Party CRO results testing humans for its Thyroid treatment using Star Scientific's Anatabloc Technology. Of greatest importance of course is if the Thyroid results are positive, as this will be the first time an autoimmune disease has been put into remission. If Star's Anatabloc Technology can treat or cure one autoimmune disease, in this case "Hashimoto" Thyroiditis, then there is no reason to think it cannot help cure other autoimmune diseases such as Diabetes, Rosacea and Alzheimer's.

      Clearly this is not just a catalyst but also a ground-breaking event as the possibilities of the technology are endless and can significantly advance the medical industry against these aforementioned diseases. The Thyroid research has been done by the Johns Hopkins University School of Medicine, one of the most preeminent medical institutions in the world, under the lead of Paul Ladenson, Hopkins Chief Endocrinologist. It is widely believed that Dr. Ladenson will use of Anatabloc in Thyroid treatment and that Hopkins will continue to test this technology, and its efficacy on at least two or three diseases other than Thyroid.

      If the technology is a success, sales of Star's consumer product Anatabloc will rise significantly and have immediate effects on the company's bottom line in the upcoming quarters. With any company that is experimenting with new technology and treatments there is some risk, however, the upside potential is tremendous considering that the stock trades at $2.65. Most options are more expensive than picking up some shares of STSI, which has the potential to revolutionize the industry.

      Sentiment: Strong Buy

    • bump to the top

    • "I invest for a living and I might add successfully. I have to say that this stock is as tough as any I’ve been heavily involved with in the past 35 years. The story is a “change of life” story (not just the product, the stock) and all the work I’ve done shows “IT CHECKS OUT.” Yet the direction of the stock’s price remains in the hands of the shorts. This continues even as institutional ownership keeps rising to one record level after another. Another compelling sign is that “Insider” ownership keeps rising and no one sells – an incredibly strong sign. There are a million reasons for an insider to sell, there is only one reason to buy more.
      The story today is infinitely better today than it was over a year ago in mid 2011, when the stock reached $5 a share. Then we had big “hopes” today we have facts, data, testimonials, proof of concept – from ambassadors, the Roskamp Institute, Johns Hopkins, GNC,( dare I say Harvard Medical School?), the Number One Endocrinologist in the country and endless friends, neighbors and family members who are living, breathing proofs that something amazing is happening.
      So why do the shorts rule the day? I have a few answers.
      First, historically betting against “biotech” is usually a good bet, most companies never end up with a commercial product and all take longer and spend more money than anticipated.
      Second, the shorts were betting against a huge tobacco settlement from Reynolds. They have a short term victory on this, but the company isn’t the same company it was when they made the bet (Anatabloc), AND, the tobacco science has been proven and the ownership confirmed by the USPO and the federal courts. Someday someone will pay substantial amounts for this essential science, and it may be to a separate entity which we will own off of the Star/Rock Creek balance sheet. (Read spinoff.)
      Third, the shorts thought they could put the firm under with endless legal challenges while the company was bled dry. Well, the legal efforts are over now, expenses are substantially reduced, Anatabloc is cash flow positive and there is $30 million in the bank which will last far beyond break even.
      Finally, the short position is big and it’s hard to cover especially when the shorts can still control the price. One reason for this is that the company still doesn’t have conventional Wall Street research. That is changing. The Hopkins study gives Star new credibility and as the company forges new relations with other biotechs (one was just announced) and Big Pharma, their investment bankers and researchers will learn of Star and Anatabloc and start coverage. (One hears that some of Reynolds research coverage analysts are already taking Anatabloc and were anxious to get their biotech analysts to cover Star.)
      So this is my take. Stay away from buying calls, go easy on the margin, don’t buy more than you can afford and stay the course. This stock has a history of up-side surprises and dramatic price increases, it has a powerful and savvy board of directors, it has relationships with some of the medical communities finest institutions, it has many hundreds (thousands?) of devoted consumers and sales are growing at an alarming pacer. When we see diabetes and thyroid suffers added to the mix, we will no longer be a single digit stock, and some of us expect a whole lot more."
      .........................
      If I were short Star and read this I would cover NOW, even though you indicate it might take a while to take off.

      • 1 Reply to rocker765
      • The thing about short sellers is that since they have unlimited downside they tend to NOT be dopes...say like delusional moronic junior investors who have no clue about the relationship between a companies stock price and its ultimate value.

        It's difficult to come up with a sales scenario that even comes close to justifying STSI's current valuation. Using cash raised by by dropping warrant exercise prices to less than half the current trading price then using the cash to hype your product all over radio, internet etc does not look like a story that will end well for investors.

    • That's a fine post.

      Sentiment: Strong Buy

    • My fat finger again-I attempted a thumb up and got the opposite. Thanks for the good post.

      Sentiment: Strong Buy

    • Excellent post with good advice. Who knows how long the games will last, but the outcome is not in doubt. Throw in those who want to reduce heart attack risk, avoid strokes, ameliorate alzheimer's, and fight other autoimmune maladies and you have a clearer picture of what that outcome will be.

      Sentiment: Strong Buy

    • What are thoughts on the naked short in the stock. Do you believe it could be as big or bigger then the legal short?

      Sentiment: Strong Buy

 
STSI
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