The 8.3% year-over-year increase in Consumer Price Index (CPI) for August has surpassed economists’ estimates and confounded the hopes of investors expecting ease in prices. An unexpectedly hot inflation report guarantees the Federal reserve’s hawkish stance, further enhancing the odds of an already weak economy slipping into a recession.
The Fed officials are expected to raise interest rates by 75 basis points for the third time in its meeting this week to tame the stubborn inflation. The increased market volatility and the Fed’s unrelenting hawkishness spell trouble for firms that need funds to sustain and grow themselves.
Hence, we think it would be wise to get rid of fundamentally weak penny stocks Mullen Automotive Inc. (MULN), Astra Space, Inc. (ASTR), GeoVax Labs, Inc. (GOVX), American Cloud Virtual Technologies (AVCT), and Ra Medical Systems, Inc. (RMED) to protect your capital amid the recent market turbulence.
Mullen Automotive Inc. (MULN)
With a $255.82 million market cap, MULN is an electric vehicle (EV) manufacturer and distributor that operates in various business verticals focused on the automobile industry.
The company owns and runs businesses such as CarHub, which uses AI to give a user-friendly way to buy, sell, and own a car, and Mullen Energy, which sells battery technology and emergency point-of-care solutions.
On September 8, 2022, MULN announced its acquisition of a 60% controlling interest in Bollinger Motors for $148.2 million in cash and stock. There may be a significant delay before the benefits of this deal get accrued to MULN, while the burden of the acquisition weighs on the company’s finances.
On September 1, MULN announced its partnership with Watergen Inc. to launch water-from-air solutions for its EVs. Since Watergen also has collaborations with leading OEMs, MULN is unlikely to derive any competitive advantage from this collaboration.
During the third quarter of the current fiscal ended June 30, 2022, MULN’s loss from operations widened 184.5% year-over-year to $18.22 million. During the same period, its net loss worsened by 289.9% year-over-year to $59.47 million, which translated to a $0.16 loss per share.
The stock has declined 41.2% over the past month and 91.4% year-to-date to close the last trading session at $0.50.
MULN’s POWR Ratings confirm our bearishness regarding the stock. The company has an overall F rating, which translates to a Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
MULN also has an F grade for Value and Stability and a D for Sentiment and Quality. It is ranked #58 out of 65 stocks in the D-rated Auto & Vehicle Manufacturers industry. Click here to access the Growth and Momentum ratings for MULN.
Astra Space, Inc. (ASTR)
With a market capitalization of $198.97 million, ASTR provides launch space services to satellite operators, satellite manufacturers, government agencies, and prime defense contractors. The company offers its services through a constellation of small satellites that can fit inside standard shipping containers for deployment anywhere in the world where its spaceports are located.
For the fiscal 2022 second quarter ended June 30, 2022, ASTR’s operating expenses increased 126.9% from the year-ago value to $67.84 million. Its operating loss widened 176.3% year-over-year to $82.61 million. Net loss worsened 163% from the prior-year quarter to $82.30 million. Loss per share came in at $0.31 in the same period.
For the fiscal quarter ending September 2022, Street expects ASTR to report a loss of $0.18 per share. Also, the company’s loss per share for the current year is expected to come in at $0.84, widening 25.7% from the previous year.
The stock has slumped 45.7% over the past month and 88.9% year-to-date to close the last trading session at $0.75.
ASTR’s POWR Ratings reflect the stock’s bleak prospects. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. It also has F for Stability and D for Sentiment, Growth, and Quality.
In the 31-stock D-rated Airlines industry, it is ranked #30. Click here to see the additional POWR Ratings for ASTR for Momentum and Value.
GeoVax Labs, Inc. (GOVX)
GOVX is a clinical-stage biotechnology company that uses its platforms to develop vaccines and immunotherapies against infectious diseases and cancer. The company has a market capitalization of $28.46 million.
For the second quarter of the fiscal (ended June 30, 2022), GOVX didn’t report any revenue to offset its operating expenses, which increased 43.2% from the prior-year period to $2.24 million.
The company’s loss from operations widened 50.9% from the year-ago value to $2.24 million, while its net loss worsened 70.6% year-over-year to $2.24 million. GOVX also reported a loss per share of $0.18 during the quarter.
Analysts expect GOVX to report losses per share during the current and next fiscal year. The stock has plummeted 52.5% over the past month and 70.7% year-to-date to close the last trading session at $1.15.
GOVX’s weak performance and bleak outlook are reflected in its overall rating of D, which translates to a Sell. Moreover, it has a grade of F for Momentum and Stability.
GOVX is ranked #228 among 400 stocks in the F-rated Biotech industry. Click here to see additional POWR Ratings for GOVX (Growth, Value, Sentiment, and Quality).
American Cloud Virtual Technologies (AVCT)
As a provider of global cloud communications, AVCT offers a range of services, including unified cloud communications, managed services, cyber security, and enhanced connectivity. The company has a market capitalization of $23.43 million.
AVCT’s total revenue decreased 24.8% year-over-year to $3.72 million for the fiscal 2022 second quarter ended June 30, 2022. The company reported a gross loss of $1.55 million, compared to a gross profit of $1.38 million in the prior-year quarter.
Its loss from continuing operations widened 105.6% from the prior-year quarter to $24.01 million. Net loss per share for the quarter came in at $0.08.
The stock has declined 92.6% year-to-date and 94.4% over the past year to close the last trading session at $0.19.
AVCT’s poor prospects are also apparent in its POWR Ratings. The stock has an overall D rating, which equates to a Sell in our proprietary rating system. It also has an F grade for Quality and a D for Growth, Stability, and Sentiment.
AVCT is ranked #73 among 81 stocks in Technology - Services industry. Click here to access the additional POWR Ratings for AVCT (Momentum and Value).
Ra Medical Systems, Inc. (RMED)
As a medical device company with a market capitalization of $7.44 million, RMED is involved in developing, manufacturing, and marketing excimer lasers to treat vascular immune-mediated inflammatory diseases.
On September 12, RMED announced its entry into the Definitive Merger Agreement with Catheter Precision, Inc. As a result, the latter is set to become a wholly owned subsidiary of RMED. The combined entity is expected to take significant time to reap the benefits of gaining a greater share of the cardiac electrophysiology market to offset the financial burden of this deal.
On September 2, RMED announced that it had received a notice from NYSE American LLC. The stock exchange has determined that the Company’s securities have been selling at a low price per share for a substantial period.
Hence, to stay listed, RMED has been advised to either effect a reverse stock split of its common stock or demonstrate sustained price improvement by February 28, 2023.
For the second quarter of the fiscal year (ended June 30, 2022), RMED’s revenues declined 44.4% year-over-year to $5,000. During the same period, the company’s operating loss and net loss widened 25.6% and 60.9% year-over-year to $8.46 million and $8.45 million, respectively. RMED also reported a net loss per share of $0.26.
Analysts expect RMED’s revenue for fiscal 2022 to decline 99.6% year-over-year to $10,000. The company is expected to report an annual loss per share of $0.72 and continue to report losses over the next two fiscals.
The stock has lost 17.7% over the past month and 91.7% year-to-date to close the last trading session at $0.14.
RMED’s weak performance is reflected in its overall POWR Rating of D, which translates to a Sell in our proprietary rating system. It also has an F for Stability and Quality and a D for Momentum and Sentiment.
RMED is ranked #135 among 166 stocks in the D-rated Medical - Devices & Equipment industry.
In addition to the above, we have also rated RMED for Growth and Value. Click here to view all ratings for RMED.
MULN shares were trading at $0.46 per share on Monday afternoon, down $0.04 (-8.42%). Year-to-date, MULN has declined -91.20%, versus a -17.72% rise in the benchmark S&P 500 index during the same period.
About the Author: Santanu Roy
Having been fascinated by the traditional and evolving factors that affect investment decisions, Santanu decided to pursue a career as an investment analyst. Prior to his switch to investment research, he was a process associate at Cognizant. With a master's degree in business administration and a fundamental approach to analyzing businesses, he aims to help retail investors identify the best long-term investment opportunities.
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