The U.S. economy is estimated to register diminished growth rates in 2022 due to record high inflation and soaring energy prices. Many expect inflation to remain high despite the possibility of aggressive interest rate hikes because of rising sanctions on Russia and soaring energy prices. Oil and gas prices are on the rise due to poor productivity. These factors have significantly dampened investor sentiment lately, as evident from the SPDR S&P 500 Trust ETF’s (SPY) 5.8% decline over the past three months.

Fears of a future recession cannot be ruled out. Deutsche Bank Securities Chief U.S. Economist, Matthew Luzzetti, predicts a recession to come by the next fiscal. Thus, fundamentally weak and overvalued stocks might witness a pullback in the near term.

Popular stocks Vinco Ventures, Inc. (BBIG) and 22nd Century Group, Inc. (XXII) look significantly overvalued at their current price levels, given their weak fundamentals. So, these stocks are best avoided now.

Vinco Ventures, Inc. (BBIG)

BBIG operates as a consumer product research and development, manufacturing, sales, and fulfillment company in North America, the Asia Pacific, and Europe. It offers toys, plush, homewares, and electronics to retailers, distributors, and manufacturers.

On February 16, 2022, BBIG completed its acquisition of technology solutions provider AdRizer LLC. However, given the company’s weak financials, this might not yield immediate results.

BBIG’s net revenues decreased 18.5% year-over-year to $9.79 million for the year ended December 31, 2021. Its net loss increased 13,738.9% year-over-year to $713.18 million, while its net loss per share came in at $11.24, up 2,193.9% year-over-year.

In terms of trailing-12-month EV/S, BBIG’s 44.78x is significantly higher than the industry average of 1.26x.

Over the past three months, the stock lost 40.1% to close the last trading session at $2.44.

BBIG’s POWR Ratings reflect its poor prospects. It has an overall grade of F, which indicates a Strong Sell. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has an F grade for Growth, Value, Stability, and Quality and a D grade for Momentum and Sentiment. Click here to access the POWR Ratings for BBIG. It is ranked #60 of 61 stocks in the D-rated Consumer Goods industry.

22nd Century Group, Inc. (XXII)

XXII is an agricultural biotechnology company that focuses on tobacco harm reduction, reduced nicotine tobacco, and enhancing health and wellness through plant science for the life science and consumer products industries.

XXII’s net sale of products increased 8.9% year-over-year to $7.96 million for the fourth quarter ended December 31, 2021. However, its comprehensive loss came in at $14.10 million, compared to a loss of $6.47 million in the previous period. Its loss per share came in at $0.09, up 80% year-over-year.

Currently, the stock has a forward EV/S of 7.63x versus the industry average of 1.80x. Its forward P/S of 8.82x is also 604.4% higher than the industry average of 1.25x.

Analysts expect XXII’s EPS to remain negative in 2022 and 2023. Moreover, its EPS is estimated to decrease 66.7% for the quarter ended June 2022. The stock lost 31.7% year-to-date to close the last trading session at $2.11.

XXII has an overall F grade, equating to a Strong Sell in our proprietary rating system. In addition, it has an F grade for Value and Quality and a D grade for Momentum, Stability, and Sentiment.

We’ve also rated it for Growth. Click here to access all the XXII ratings. It is ranked #402 of 405 stocks in the F-rated Biotech industry.

BBIG shares were trading at $2.54 per share on Monday afternoon, up $0.10 (+4.10%). Year-to-date, BBIG has gained 6.72%, versus a -7.35% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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