Star Scientific Shares Plunged: 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  ) fell more than 13% in early trading before closing down 3.5%. The Big Move was the stock's third since the beginning of June, twice to the downside.

So what: In many ways, the cigarette maker is a trader's dream. High-beta stocks such as Star Scientific -- which tends to move twice as much as the overall market -- offer plenty of opportunity to get in and out in a given day, eking out gains along the way.

Now what: Yet there’s a good reason we Fools advise caution when it comes to trading in Mr. Market's Mega Movers. One day of bad timing could cause years of portfolio grief. Bear that in mind before you "play" Star Scientific at these levels. Do you agree? Disagree? Weigh in using the comments box below.

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

Fool contributorTim Beyers is a member of theMotley 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 Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.


Read/Post Comments (4) | Recommend This Article (5)

Comments from our Foolish Readers

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  • Report this Comment On August 03, 2011, at 10:28 PM, ArhurBowdoin wrote:

    Tell me why this item has any value whatsoever. No information about the company or the move at all. How is *nothing* something I need to know?

  • Report this Comment On August 04, 2011, at 9:17 AM, YankeesWin wrote:

    From what I have read about Star, they have several key pps drivers in the pipeline.

    1) Several test on one of there compounds that may help Alzheimer's, chronic inflammation, ect.

    2) Recent favorable rulings on a patent issue with a tobacco curing process they invented that may produce several hundred million to billions in rewards

    3) Some new smoking cessation product that seems to be selling extremely well.

    I am tempted to buy in 1/2 now before earnings on the 9th and the other half if they beat estimates.

  • Report this Comment On August 04, 2011, at 3:28 PM, iComunic8 wrote:

    ...what is it exactly I need to know Motley Fool?

    sadly, your "inference" is misguided. Significant progress on many fronts indicates CIGX at these

    levels is a strong buy.

  • Report this Comment On August 04, 2011, at 9:31 PM, iComunic8 wrote:

    in fact, STAR is NOT a "cigarette maker", but in fact producer of harmless tobacco alternatives...wish you would get your facts straight...getting hard to trust an analysis (?) based upon incorrect assumptions.

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