Domestic tobacco cigarette shipments are declining, but e-cig sales are on the rise. While several major tobacco companies have acquired or developed their own e-cig products, the biggest by far belong to Lorillard (NYSE:LO). Lorillard acquired blu e-cigs in 2012, and now controls around 40% of the e-cig market. This will greatly benefit Lorillard in the years ahead as e-cigs become more popular.
Consumer Goods Editor Mark Reeth thinks that the popularity of e-cigs will skyrocket once consumers realize two of the major benefits of e-cigs: cost savings and health benefits. A high initial price point for blu e-cigs overshadows the savings smokers will experience down the line, while FDA regulations prevent Lorillard from selling blu e-cigs as a way to stop smoking. If and when Lorillard gets past these obstacles, the company is poised for huge profits.
Fool contributor Mark Reeth has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.
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