Star Scientific (CIGX) Should Be Worth About Nothing
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Star Scientific, Inc. (Nasdaq: CIGX) has barely cracked into positive territory this morning, following a negative blog article by TheStreetSweeper.
TheStreetSweeper says that the share price should be closer to a penny, based on unfulfilled claims and lackluster performance.
Notably, Star's revs of $848 thousand last year pales in comparison to the $223 million it reported just over a decade earlier.
What's more, shares are trading at 720 times prior year sales ($596 million dividend by about $848 thousand). As said, putting the same valuation used when the stock was at its peak would put shares near worthless.
Star's current market valuation is also $600 million, about 35 percent higher than where it was at its peak.
Why is that? Investors may be betting on its ambitious plans, TheStreetSweeper claims. Star is aiming to prove that certain tobacco compounds will cure Alzheimer's disease. Star is also seeking gains from beating bigger tobacco companies in lawsuits.
From the report: "Take a look at the company’s latest quarterly results, just for starters. Star posted total revenue of $156,000 during the first quarter, corporate filings show, with dwindling sales of its most-established product – tobacco-based “Hard Snuff” lozenges now competing with well-branded rivals – plummeting 26% to $110,000 “due to higher returned goods and promotion costs.” Star generated the rest of its meager revenue from its newer CigRx offering, a nutritional supplement designed to curb nicotine cravings, but that product – introduced a full year earlier – still mustered less than half the revenue posted by the company’s shrinking hard snuff business despite the celebrated launch of a national marketing campaign."
CigRx added 29.5 percent to top line growth last quarter.
Click here to read the full report.
TheStreetSweeper says that the share price should be closer to a penny, based on unfulfilled claims and lackluster performance.
Notably, Star's revs of $848 thousand last year pales in comparison to the $223 million it reported just over a decade earlier.
What's more, shares are trading at 720 times prior year sales ($596 million dividend by about $848 thousand). As said, putting the same valuation used when the stock was at its peak would put shares near worthless.
Star's current market valuation is also $600 million, about 35 percent higher than where it was at its peak.
Why is that? Investors may be betting on its ambitious plans, TheStreetSweeper claims. Star is aiming to prove that certain tobacco compounds will cure Alzheimer's disease. Star is also seeking gains from beating bigger tobacco companies in lawsuits.
From the report: "Take a look at the company’s latest quarterly results, just for starters. Star posted total revenue of $156,000 during the first quarter, corporate filings show, with dwindling sales of its most-established product – tobacco-based “Hard Snuff” lozenges now competing with well-branded rivals – plummeting 26% to $110,000 “due to higher returned goods and promotion costs.” Star generated the rest of its meager revenue from its newer CigRx offering, a nutritional supplement designed to curb nicotine cravings, but that product – introduced a full year earlier – still mustered less than half the revenue posted by the company’s shrinking hard snuff business despite the celebrated launch of a national marketing campaign."
CigRx added 29.5 percent to top line growth last quarter.
Click here to read the full report.
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