Electronic Cigarette Stocks are a Healthy Investment
Ilana is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Electronic cigarette companies are a healthy investment for casual and everyday traders. These e-cigarette companies offer the tobacco industry a potential source for growth with up-and-coming stocks like Vapor Corp (PINK: VPCO), Smokefree Innotec (PINK: SFIO), and Medifirst Solutions (OTC: MFST). There is reason to think that electronic cigarettes are healthy investments because it is already a $300 million market within the tobacco industry, and has the growth potential to become a $1 billion market share within three years. Perhaps even more appealing is that the market is full of privately held companies that have already established a strong presence. Among the more successful of these companies is Vapor Corp.
Vapor Corp has become one of the leading electronic cigarettes with its Smoke Fifty-One®, Krave®, Green Puffer®, Americig®, VAPOR-X® and EZ Smoker® brands. The company's stock is soaring due to its cutting edge vaporizer technology that enables it to discharge liquid herbal formula. This technology has been such a success that recently its stock price rose 13.64% to $0.25, for a market cap of $15.05 million. Vapor Corp. says its business strategy is to leverage its unique ability to design market and develop multiple e-cigarette brands and then bring those brands to market through multiple distribution channels. In addition, Vapor Corp has recently reported that net sales for the nine months ended September 30 rose 33.3% to $21M.
Smokefree Innotec (PINK: SFIO) is a manufacturer of cigarette-like delivery devices that are free of smoke, vapor and tobacco. This is a smaller company than Vapor Corp., so it does not have the similar amount of press and market presence. However, the company saw a 60% increase to $0.0008 for a market cap of $316,700. However, Smokefree Innotec is down 27.3% since the start of the year and down 98.9% over the past five years.
Medifirst Solutions (OTC: MFST) is a diverse company that offers the Miracle-cig as one of its three major branches. The Miracle-cig is a disposable electronic cigarette that have a one-off sales price at $9.95 per unit, with unit cost per product being about $2.50. They have no experienced any barriers to entry, but shares are down 98.3% since early 2009. Ultimately, although the company has a larger marketing capacity than Vapor Corp., they conduct most business sales via SEO and affiliate partners online.
The bottom line is that Vapor Corp. will be the biggest winner in this market. Their stock price is much smaller than expected, and investment now will undoubtedly propel its price into the $1 and above level. So adventurous investors may consider bypassing up-and-coming electronic cigarette stocks like Smokefree Innotec and Medifirst Solutions, and focus on the more established Vapor Corp. Since the electronic cigarette market was established in 2009, Vapor Corp. has jockeyed for the top position amongst privately held companies in the market with 2012 sales topping over $20 million. Ultimately, Vapor Corp has the potential to be traded well beyond its current value, as its stock price could burst with more investment put into PR and brand awareness campaigns.