Investors who bought stocks during the COVID-19 market crash in 2020 have generally experienced some big gains in the past two years. But there is no question some big-name stocks performed better than others since the pandemic bottom.
Cronos' Bumpy Ride: One company that has been a disappointing investment in the past two years has been Canadian cannabis giant Cronos Group Inc (NASDAQ: CRON).
Cronos battled a difficult Canadian cannabis market throughout 2020 and 2021. Cronos has the financial backing of tobacco giant Altria Group Inc (NYSE: MO), which owns nearly 50% of Cronos. Altria’s support has allowed Cronos to operate with one of the strongest balance sheets in the cannabis space, but the stock has still struggled to gain traction.
At the beginning of 2020, Cronos shares were trading at around $7.90. By the beginning of March, the stock was down to $5.89 after news of COVID-19 spreading in China prompted concerns about a U.S. pandemic.
Cronos bottomed at $4 during the pandemic-driven March sell-off. Fortunately for Cronos investors, the sell-off didn’t last long.
By June, Cronos shares made it back up to $8.13, but the rally stalled at that point until the November presidential election in the U.S.
Also See: Benzinga's Cannabis Capital Conference in Miami kicks off soon! Click here to learn more about the two-day (April 20-21) event
The victory of Joe Biden, and a surprise blue wave, gave Democrats control of both the Senate and House, sending cannabis stocks soaring on optimism that U.S. cannabis legalization may be just around the corner.
Cronos In 2022, Beyond: The stock ultimately peaked at $15.83 in February 2021 during a retail investor-fueled short squeeze before pulling all the way back to $3.32 today.
Unfortunately, investors who bought Cronos on the day it hit its 2020 pandemic low and held on have now generated a negative return on their investment. In fact, $1,000 in Cronos stock bought on March 16, 2020, would be worth about $614 today.
Looking ahead, analysts are expecting a minimal rebound for Cronos stock in the next 12 months. The average price target among the 13 analysts covering the stock is $3.56, suggesting just 7.6% upside from current levels.
