Wednesday, December 10, 2014

Who's Winning the E-Cig Battle? $MO $RAI $LO $MCIG $ECIG

So far, it is the major tobacco companies who are capturing the lion's share of the electronic cigarette market.  The IPO of ECIG, which was in October, has been a catastrophic flop so far, with shares down from the $4.50 IPO price to about .20 per share.

Not surprisingly, MO RAI and LO are growing market share of their electronic cigarettes because they have the distribution channels in place along with a healthy budget to market the products however much as they need to.

A smaller name that I think will win here eventually is MCIG because its device can also be used for marijuana.  Also, they did not start with high sales and they do not have that large of a market cap (about $44 million right now).  As a result, the bar is not too high and even $10 million in sales in a market estimated to grow to about $10 billion in 3 years will be huge for MCIG if it can achieve it.

I see long-term that there will be a handful of OTC winners in this market and the large tobacco players obviously will win as well.

I am long MO, RAI, LO, MCIG.

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