The Fool heads out to Vegas to check out the 2014 International Consumer Electronics Show. With more than 3200 exhibitors, including 88% of the top retailers in consumer electronics, the CES is the place to be to see what's coming up in tech.

Think e-cigarettes are hurting big tobacco? True, standard cigarette sales are down, but a lot of tobacco companies are simply acquiring the e-cigarette sellers to make up for the loss.

There were countless trends emerging from CES 2014 this year, but the real question for investors is how to capitalize on these revolutionary opportunities. Fortunately for you, David Gardner has an idea or two on how to invest in these new emerging technologies -- and how you can profit. Get in on the ground floor now by clicking here.

A full transcript follows the video.

Austin Smith: Hey Fools, Austin Smith, here from the floor of CES 2014, here to talk about an interesting trend that we saw in the digital health section of the CES floor, and that was electronic cigarettes.

Very interesting to see this industry, notoriously associated with poor health, making its way very rapidly into better health, using this bridge of electronic cigarettes. Now, investors are very interested in this topic, going forward.

The way that we see it, there's a couple different avenues to look at. There's a lot of companies on the back end, maybe doing the picks and shovels, some of the technology behind e-cigarettes, but many of them are pink sheet stocks, and very, very speculative and risky as a result.

Therefore, looking to the major tobacco companies, there's different ways that this impacts their business. Of course, many people see it as a negative, detracting sales from typical cigarette sales, but the reality is many of these tobacco companies are acquiring a lot of these e-cigarette manufacturers and using it to supplement declining typical tobacco sales.

The good news is, these e-cigarettes typically come with EBITDA margins about twice as high as typical tobacco products, and they operate on very much a razor and blade model.

One of the interesting things to watch are the smaller e-cigarette companies that these major tobacco players are buying. Lorillard (NYSE:LO) recently picked up blu eCigs, and there's Philip Morris (NYSE:PM), Altria (NYSE:MO), Reynolds American (NYSE:RAI); a lot of companies in this space.

This is really going to come down to who has the best distribution first, because most of the products that we're seeing here are virtually identical in function. What's really going to matter is which tobacco companies are picking up which manufacturers and getting those products out there as fast as possible.

Remember, these big tobacco companies are the ones with the distribution relationships in place; Lorillard's acquisition of blu eCigs, maybe about 12-18 months old at this point ... already blu eCigs is the number two seller, by most measures, of electronic cigarettes. Getting out there first, getting your products into these distribution channels, we see being much more important and much more significant than the actual technology in the electronic cigarettes themselves.

Thank you very much for tuning in. For all of your CES coverage, make sure to head over to

Austin Smith owns shares of Philip Morris International. The Motley Fool owns shares of Philip Morris International. 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.

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