E-Cigarettes: Big Tobacco and FDA Start Paying Attention

E-Cigarettes: Big Tobacco and FDA Start Paying Attention

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The proliferation of electronic cigarettes has caused a lot of controversy among cigarette activists and smokers alike. On one side are a number of former smokers of traditional cigarettes (and even a few public health experts) who argue that the e-cigarette is clearly a better alternative health-wise, and a huge boon to people who want to keep using nicotine without the detrimental health effects that accompany lighting up.

On the other hand, you have a growing outcry among anti-tobacco advocates, who argue that many of the flavorings in electronic cigarettes – which include cotton candy and bubble gum – are an obvious marketing ploy to entice younger smokers to a more socially acceptable practice. 

The New York City council is considering a ban on a number of e-cigarettes, as well as a law that would raise the legal age for tobacco purchases up to 21. In a similar spirit, the FDA is considering whether or not sales of e-cigarettes should be regulated online, the Wall Street Journal reported on Friday. Taken together, you see clear efforts pushing back against the first major new product that the cigarette industry has come up with in years. 

Though e-cigarettes at the moment only make up about about 0.5% of the domestic tobacco market, a lot of investors are making bets that share will grow. Silicon Valley investor Sean Parker put $75 million into an e-cigarette developer earlier in the summer, and Lorillard Inc (LOR), the third largest traditional cigarette company in the country, acquired their own e-cigarette company last year. Tobacco bulls are also looking at huge returns worldwide - roughly $2 billion globally – as a sign that the market has a lot of room to grow. 

All the hype has prompted Altria (MO), and Reynolds American Inc. (RAI) to introduce e-cigarette brands as well – indicating that the new technology is likely to continue its path into the smoker's mainstream. 

Click on the interactive charts below to view analyst rating over time.

Does the proliferation of e-cigarettes interest you as an investor? Use the list below as a starting point for your own analysis. 

1. Lorillard, Inc. (LO, Earnings, Analysts, Financials): Engages in the manufacture and sale of cigarettes in the United States. Market cap at $15.76B, most recent closing price at $41.92.



2. Altria Group Inc. (MO, Earnings, Analysts, Financials): Engages in the manufacture and sale of cigarettes, smokeless products, and wine in the United States and internationally. Market cap at $66.99B, most recent closing price at $33.46.



3. Reynolds American Inc. (RAI, Earnings, Analysts, Financials): Manufactures and sells cigarette and other tobacco products in the United States. Market cap at $26.21B, most recent closing price at $47.98.



(List compiled by James Dennin. Analyst ratings sourced from Zacks Investment Research, all other data sourced from Finviz.)

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5 Responses to “E-Cigarettes: Big Tobacco and FDA Start Paying Attention”

  1. I know several people who used e-cigarettes to quit smoking, and unofficially my doctor thinks the idea is wonderful, I’m not so sure, but, there it is.

  2. E cigarettes are also called as electronic cigarettes and they are very popular. I think those who want to quit the habit of smoking traditional cigarettes they should switch to e cigarettes. The manufacturers do not sell these cigarettes as an alternative. Many people who have started using these cigarettes they have seen improvement in sleep. It has also been found in some research that after starting e cigarettes people have give up smoking problem. I am also an e cigarette user.

  3. titan-v says:

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  4. But what if all that is not true? What we all are gonna do about it? It is weird.

  5. Today has beyond any doubt been a pretty dismal day for Nintendo staff, shareholders and fans alike. As we have a tendency to discovered earlier within the day, Nintendo square measure financially not in an exceedingly good place. With Satoru Iwata later adding that he has no intention of stepping down. Nintendo Feed takes an instant to explore Nintendo's choices now, wherever is the way forward? Nintendo ought to bring on some pretty drastic change.

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