With half of 2012 in the record books, it's important to take a look at whether the stocks that interest you can live up to their full potential. By making sure you know about a company's future plans and possible challenges, you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Star Scientific
Stats on Star Scientific
|2012 EPS Estimate||($0.10)|
|2013 EPS Estimate||($0.08)|
|2012 Sales Growth Estimate||298%|
|2013 Sales Growth Estimate||52%|
|CAPS Rating (out of 5)||*|
Source: S&P Capital IQ.
What will the rest of 2012 bring for Star Scientific?
Traditionally, most investors have lumped Star Scientific into the same category as big tobacco stocks, owing to Star's attempts to create less carcinogenic tobacco. As a result, given the success that Altria
But Star Scientific's future prospects all hinge on its dietary supplement business. Revenue for Star's dissolvable tobacco products remains insignificant, but supplement sales have skyrocketed and will contribute nearly all of its growth going forward. With its distribution deal with GNC Holdings
In particular, most of the news recently has centered on the company's Anatabloc dietary supplement. Late last month, Star Scientific got a patent for producing anatabine, which is the supplement's active ingredient. At a presentation before a meeting of endocrine medical specialists, the company announced a study that suggests possible thyroid benefits from Anatabloc as well.
Looking forward, Star Scientific's ramp-up in sales could well lead more investors into the stock, even though profitability still seems a long way off. The key to look for is how well Star Scientific does in keeping costs down and preserving its cash rather than having to do dilutive stock offerings to raise capital.
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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. 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 has a disclosure policy.