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Is 22nd Century Group a Buy Under $5?

Stock MarketsJun 01, 2021 11:30AM ET
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© Reuters. Is 22nd Century Group a Buy Under $5?

Currently trading at $4.50, plant-based biotech company 22nd Century Group (NYSE:XXII) has garnered significant investor attention to its VLN cigarette based on the expectation that the FDA will soon release a proposal for the reduction of nicotine levels in cigarettes. However, given that the company has not yet received an approval for its product, will it be a risky bet now? Read on.A leading plant-based biotechnology company, 22nd Century Group, Inc. (XXII) develops extremely low nicotine content tobacco products under the Moonlight and Moonlight Menthol brands, using proprietary genetic engineering technology. Its shares have risen 104.6% year-to-date on investors’ optimism about the company’s advancement in the global commercial markets for tobacco and hemp/cannabis.

However, XXII’s stock price has tumbled 19.9% over the past month. In fact, the stock closed yesterday’s trading session at $4.50, 25.9% below its $6.07 52-week high.

The company has yet to receive the FDA’s approval for its Modified Risk Tobacco Product VLN. And, because favorable federal legislative prospects for cannabis have increased competition in the cannabis space, XXII’s weak financials and high valuation could be a drawback for the stock.

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Is 22nd Century Group a Buy Under $5?
 

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