Star Scientific Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Star Scientific (Nasdaq: CIGX  ) rose more than 14% in early trading and remain up more than 10% as of this writing. Why? Volatility.

So what: The high-tech tobacconist saw its shares fall 19% in yesterday's sell-off. So while today's rally is nice, it has yet to make up for the beat-down Mr. Market delivered. Welcome to the world of high-beta stocks.

Now what: Investing in high-beta stocks brings high highs and low lows, and rarely much in between. Winning with them can be a matter of timing, though Star Scientific has provided generous returns to long-term holders. (The stock is up five times since late 2009.)

Most of the gain is because of the story. Star's CigRX dietary supplements propose to reduce or even eliminate cigarette cravings. Revenue has been hard to come by and profits equally elusive, but some maintain Star's litigation with the RJ Reynolds tobacco company could yield a payday well above its $635 million market value.

Interested in more info on Star Scientific? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 02, 2011, at 3:48 PM, CIGXbeliever wrote:

    Actually, it's not just that for those in the "know". Their nutrazceutical found in tobacco that shows promise for stopping inflammation and thus helping thyroid, alzheimer's and many other syndromes is what makes this stock promising Tobacco is just the tip of the iceberg. Johns Hopkins, Roskamp is involved- this is legit.

  • Report this Comment On June 02, 2011, at 5:02 PM, alanbruce wrote:

    this article says absolutely nothing. why waste the time to post it and my time to read?

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1502557, ~/Articles/ArticleHandler.aspx, 8/20/2014 10:58:13 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement