22nd Century Group (Nasdaq: XXII) Looks Set For Another Bull Run

22nd Century Group (Nasdaq: XXII) Looks Set For Another Bull Run  Greetings FDR Subscribers, 22nd Century Group (NASDAQ: XXII) stock presented a compelling investment proposition when we first featured it on September 23rd. As expected, investors seizing that opportunity were rewarded, with the stock appreciating over 17% intraday and even higher on the next. Moreover, with ample liquidity, evidenced by volume surpassing two million shares on each day noted, investors should have easily been able to book gains if they took a short-term trader's approach to investing. Those that did, congrats on a great trade. But we know that not all FDR subscribers are short-term momentum traders. That's why we feature companies that have the fundamentals to support a long-term strategy to deliver sustained upside movement. In XXII's case, it reacted quickly, consolidated, and then pulled back to its $0.18 price tag yesterday. That makes no sense. Supported by a couple of updates, XXII is a stronger company now than when we featured it in September. Since our initial update, XXII has published two press releases showing how its industry-changing VLN® (Very Low Nicotine) cigarettes could be the best-positioned product to seize a sizable share of a market targeting customers wanting all the pleasure of smoking but without the full measure of nicotine. The product is more than innovative; it serves a harm-reduction market that is growing in popularity. Serving the harm-reduction category boom... The appealing part of that category to consumers is that the products, like XXII's VLN®, don't deprive users of the satisfaction expected. In this case, XXII's VLN® cigarettes contain 95% less nicotine than traditional nicotine delivery products and are designed to help smokers reduce their nicotine intake without sacrificing the smoking experience they enjoy. While that's great for users, XXII also presents an excellent opportunity for investors. Here's why. 22nd Century's VLN® is the only FDA-approved cigarette that can be marketed as a Modified Risk Tobacco Product (MRTP). That distinction allows them to sell its product as one that "Helps You Smoke Less®," which resonates with smokers who aren't ready to quit but want to manage their nicotine consumption. The company is capitalizing on that designation. On September 25th, XXII announced a commitment from an existing customer to supply their filtered cigar products. As part of this deal, 22nd Century Group will assume production of all the customer's filtered cigar products using an in-house predicate blend. Initial shipments are expected in the fourth quarter of 2024, with volumes anticipated to be 200,000 cartons or more annually. Earlier this year, XXII signed an agreement with the same customer for its export conventional cigarette products business. That deal could add 20% to the overall contract manufacturing business volumes, which the company said should start to ramp up this year. Also in September, XXII announced an agreement to supply its Moonlight branded cigarettes to the Southeast Asian market, a deal that could grow its manufacturing volumes by more than 30% over the next 15 months. These updates add to others that show XXII is expanding its market presence in key markets. As importantly, with the company well-positioned to generate solid cash flows, its target of being cash flow positive by early 2025 is in the crosshairs. Products are available in thousands of retail locations... That mission is well underway. Currently, VLN® products are available in over 5,000 stores across 26 U.S. states. While impressive, XXII's ambitious plans include getting its products into at least 270,000 retail outlets nationwide. That kind of growth needs supporting infrastructure, which XXII has. In its company presentation, XXII noted its stockpile of low-nicotine tobacco ready and manufacturing capacity that could generate up to $85 million in revenue. More could follow. XXII said it plans to extend its VLN® brand with new "flanker" products, much like Coca-Cola extended its product line with Diet Coke, and Heineken introduced a zero-alcohol version of its beer. These new products would diversify the company's product portfolio while strengthening its brand and leadership positions in the reduced-nicotine category. Additionally, if XXII stays on its business course and meets expectations, the result could be XXII ushering in an entirely new product category within the tobacco industry, similar to how light beer offered a lower-calorie alternative for beer drinkers, and decaf coffee gave caffeine lovers a choice. FDR subscribers- it's easy to appreciate XXII for the products it sells. After all, they are well-designed and serve a potentially lucrative market. However, we aren't featuring XXII for that reason. FDR is all about introducing innovative companies that also present attractive investment opportunities. We did that with this company in September. The value proposition looks even more significant after a pullback in price despite publishing value-driving updates. A value proposition exposed... That assumption is based on several things. Foremost, XXII's VLN® cigarettes, as a breakthrough harm-reduction product, have the potential and early-mover advantage to disrupt the tobacco industry, similar to how decaf coffee and light beer revolutionized their respective markets. Add to that potential the FDA's MRTP designation, and XXII looks competitively better positioned than any other company to develop this market. In other words, XXII's achievements don't look to be fairly valued at current prices. Considering they are fundamentally stronger than at higher share prices, are advancing a robust product pipeline, are increasing manufacturing volumes, and are expanding into new global markets, an evidence-based case for XXII stock to move appreciably higher is well supported. Like last month, short-term and momentum investors could be rewarded. However, other than normal market fluctuations, XXII stock may do much better during a longer-term horizon into 2025. If objectives are met, prices may be more fairly represented in dollars, not cents. To Your Trading Success, Michael Reece Editor, Financial Driven Research Sources:[( [( [( [( [( [( [( [( [( [( [( [( © 2024 Financial Driven Research, All Rights Reserved. Financial Driven Research (“FDR” or “Company”) is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or inves∙tment for any specific individual. 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