Editor's Note: Lorillard's sales of e-cigs increased 10% sequentially and declined by 11% year-over-year in the first quarter.
E-cigarettes have been all the rage lately, with Lorillard (NYSE: LO ) getting the first-mover advantage among major tobacco firms with its purchase of blu ecigs for $135 million in early 2012. Although the e-cig market is still small and fragmented, Lorillard has been able to leverage blu into a dominant market share. But more competition is on the horizon. Altria (NYSE: LO ) has begun the rollout of its MarkTen e-cigarette brand, and the tobacco company also recently announced its acquisition of e-cigarette company Green Smoke for $110 million.
But there's one big myth about e-cigarettes that investors need to know about before they jump into tobacco stocks.
In this video, from Wednesday's Market Checkup, the Motley Fool's health care-focused investing show, health care analysts Michael Douglass and David Williamson take the myth of inevitable e-cigarette profitability and debunk it.
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