Thursday, March 03, 2011

Spec Portfolio Addition: Star Scientific, Inc.

This one, Star Scientific (CIGX), caught my eye recently. I sold off a small position I had in Telecom Italia for a tidy little gain and picked up some shares here.

The story on CIGX that caught my eye was this: Star Scientific Just Announced They Cured Alzheimer's Disease and Nobody Cares. A wing of CIGX isolated a compound from nicotine called anatabine that shows promise as a super anti-inflammatory, so they say...

The rest of the company is pretty interesting, too. Imagine a tobacco product producer that operates on the premise that their product does cause harm to its consumers, and thus they are out to reduce or eliminate the harm. Now that's different! This has led them to develop tobacco curing processes that inhibit the formation of certain toxic compounds in the finished products, dissolvable smokeless products, etc.

People love tobacco and they want it, no doubt about it. Smokers are harassed in numerous ways these days, but world-wide consumption is rising, not falling (that's one of the trends in developing economies - more disposable income means people tend to want more recreational drugs). If tomorrow someone came up with a cure for all smoking-related diseases, no doubt people would rush out and start up a new habit. That's tackling the issue from the "back end," so to speak; this company's approach is starting from the other end. Perhaps the two will meet somewhere in the middle?

I'm not recommending anyone buy this stock. There's a reason it's in my speculation portfolio! Do your due diligence and make up your own mind about it.

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