1-Star Stocks Poised to Plunge: Star Scientific?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, smokeless tobacco products specialist Star Scientific (Nasdaq: STSI  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Star Scientific's business and see what CAPS investors are saying about the stock right now.

Star Scientific facts

Headquarters (founded) Glen Allen, Va. (2000)
Market Cap $589.7 million
Industry Tobacco
Trailing-12-Month Revenue $4.1 million
Management Chairman/COO Paul Perito
CEO Jonnie Williams
Return on Capital (average, past 3 years) (101.1%)
Cash / Debt $10.6 million / $3.8 million
Competitors Altria
Lorillard
Reynolds American

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 47% of the 322 members who have rated Star Scientific believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those bears, All-Star zzlangerhans, offered a rather sarcastic take on Star Scientific's dietary supplement Antabloc:

In case you couldn't figure out a way to use Anatabloc to make your life better, now there's Anatabloc face cream "to improve the appearance of the skin". Who doesn't need that? I'm going to wait for the entire line of Anatabloc toiletries to come out -- shaving cream, toothpaste, and deodarant -- and then buy in bulk. Meanwhile, [subsidiary Rock Creek Pharmaceuticals] has initiated a placebo-controlled trial of Anatabloc in Alzheimer's. I heard the delay in starting the trial was because no one was sure what placebo to use to control for a placebo. I think Star had better keep hoping that RJ Reynolds just gives up on fighting the nuisance lawsuits and decides to buy them off for a couple hundred million.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. 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 Fool's disclosure policy always gets a perfect score.


Read/Post Comments (9) | Recommend This Article (10)

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 September 19, 2012, at 1:42 PM, tommsel1 wrote:

    I find it interesting that you would be so negative on this company right at a time when they will be releasing data from 2 clinical studies. One for thyroid and the other for CRP results for inflamation.John Hopkins and Roskamp would not waste their time if the clinical trials were all smoke and mirroe as you suggest. Along with the scotus making a determination on whether to hear the RJR infringement case that RJR will lose. Are you an advocate for the big tobacco firm speading your negative opinions of what will happen in the next 2 weeks? RJR must be shaking in their shoes. Who cares what you think. Its will all unfold in the next few weeks.

  • Report this Comment On September 19, 2012, at 2:35 PM, CalDawg wrote:

    The Fools need to bash this stock is comical. This is almost the exact same "poster opinion" garbage they posted a month ago. Oddly enough, the month before that they posted a piece in support of the stock, its products and potential growth, as it was climbing in share price. It almost seems as if the Fools were burned in the retrace, unable to hold their water while it gained support, and are now bashing it to justify the knee jerk reaction. Hmm...

    Anyway, the good news is, it's barely a blip on the radar in the grand scheme of things. Any six-year-old can look at the chart and see this stock has been climbing steadily for the past three years. Poised to plunge? The bigger question is, where will it be three years from now?

  • Report this Comment On September 19, 2012, at 2:57 PM, dumbski wrote:

    Well, its easy to see why you publish under the Motly FOOL name!!!!

  • Report this Comment On September 20, 2012, at 9:55 AM, strader43 wrote:

    Sorry to see such obvious and amateur attempts to denegrate STSI on MF. Don't be misled. With patent agreements likely in tobacco and positive clinical trial data on Anatabloc at hand, this likely short is getting desperate.

  • Report this Comment On September 23, 2012, at 1:54 PM, Joytotheinvstmnt wrote:

    I have suffered for many years from arthritis pain, chronic asthma, and in addition, serious seasonal allergies. Since I began taking Anatabloc, I have no need for prescription arthritis medication, have almost eliminated my asthma prescriptions (I keep my emergency inhaler, just in case, but have not needed it), & no longer suffer from my allergies. I have no idea if this nutraceutical will have any effect on any other conditions, & it really doesn't matter to me. It has been of great benefit to me & helped me to live a much more enjoyable standard of life, so even if it does nothing else, it has done everything I could have asked for. I have purchased shares in STSI, as I believe the company is on the right track to improve the living conditions of many, many people suffering like I was.

  • Report this Comment On September 23, 2012, at 5:40 PM, Retirefunds wrote:

    I like the product and its potential. Accumulating.

  • Report this Comment On September 25, 2012, at 12:01 PM, istockyou wrote:

    settlement today, ironic timing of article.

  • Report this Comment On September 26, 2012, at 6:40 AM, wallybong wrote:

    I am surprised that such a prestigious organisation as yours shd contimue with this sniping at STSI. Your continuing to refer to it as a 'tobacco' share is childish. Its miraculous healing and curing of some of the serious maladies with which we are plagued is the reason for its popularity. That it is popular with doctors can be explained by the fact that they are confronted time and again by patients who have been miraculously cured or substantally improved in their condition by using the product of their own volition. There are billions of dollars involved in the succes or failure of this company.Tto continue in your negative attitude toward the share may lead us to the irresistible conclusion that you have decided to line up in this instance with Big Pharma.

  • Report this Comment On October 11, 2012, at 6:18 PM, zzlangerhans wrote:

    Jeez, how could so many smart commenters have been so wrong?

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