Why Cronos slipped

Probably the biggest reason shares pulled back was an analyst's downgrade. GMP Securities analyst Martin Landry lowered his rating on Cronos from a buy to a hold on Feb. 5.

Does Landry think that Cronos Group's management is making mistakes? Has Cronos Group's production capacity been impaired? Have the company's prospects at home in Canada or in international markets dimmed? No, no, and no.

GMP Securities downgraded Cronos Group simply because Landry thought that "shares need a breather." And his reduced rating helped ensure that the stock got that breather.

That's really all there is to the story. Cronos Group hasn't slipped due to anything pertaining to its business fundamentals. The pullback is a result of investors deciding that a stock that's enjoyed a huge run-up -- more than 170% over the last 12 months even with the recent slide -- is due for a pullback. I know that sounds like circular logic, but it's applicable logic in this case.

Why it could fall even more

However, just because there are no fundamental reasons for concern about Cronos Group now doesn't mean that there won't be any in the future. Things can change quickly.

It's important to remember that its market cap has soared to more than $3.5 billion on minimal sales. In its las t report ed quarter, the company made only 3.8 million in Canadian dollars (less than $3 million). Pretty much all of Cronos Group's valuation hinges on expectations of tremendous growth.

There are lots of ways those expectations might not be met. Cronos might not be able to increase its production capacity as quickly as needed to meet demand, and lose to other companies that are able to do so. It's possible that global demand for marijuana won't grow as much as expected. Countries that have recently legalized medical marijuana could take longer than anticipated to build viable markets. Countries that many hope will allow legal marijuana (primarily the U.S.) might not do so anytime soon.

Even if the fundamental picture for Cronos Group doesn't deteriorate, there's no way to know for sure how long its current breather might last. If the company's next quarterly update isn't overly impressive and there are no other positive catalysts, Cronos stock could potentially languish for months.

The big picture

Now that I've painted the picture for what could happen with Cronos, let me explain what I think is most likely to happen.

First, I fully expect the company will report sizzling sales growth in its next quarter. This will be the first quarter to include revenue from the recreational marijuana market in Canada. I think it's likely that Cronos will enjoy a bump from its next quarterly update in a few weeks, ending the pullback if it hasn't already ended before then.

I also think that the Canadian government will meet its goal of opening the legal market for cannabis edibles, beverages, and concentrates used in vaping in October 2019. This new market should provide another boost for Canadian marijuana stocks, including Cronos.

My take is that Cronos Group will begin to reap the rewards from its partnership with tobacco giant Altria  later this year. This relationship is more important than just the money that Cronos will receive, although that's not an insignificant factor.

Altria CEO Howard Willard said a few weeks ago that "there are opportunities really across the world in a variety of product categories, both recreational and medicinal, that would involve [Cronos] entering new product forms and developing new products and new product brands." His words underscore that there's a much bigger opportunity before Cronos than what we've seen in the past or even what we'll see in much of 2019.

I think the big picture for Cronos Group continues to look very good. The current breather is probably nothing more than a breather for this high-flying stock. Buy Cronos on the dip? In my view, that sounds like a pretty good move for aggressive investors.

The stock of Cronos Group Inchare (NASDAQ:CRON) registered a decrease of 4.56% in short interest. CRON’s total short interest was 28.68M shares in February as published by FINRA. Its down 4.56% from 30.05 million shares, reported previously. With 9.60 million shares average volume, it will take short sellers 3 days to cover their CRON’s short positions. The short interest to Cronos Group Inchare’s float is 19.11%.

The stock increased 2.25% or $0.44 during the last trading session, reaching $19.99. About 17.65M shares traded or 19.03% up from the average. Cronos Group Inc. (NASDAQ:CRON) has risen 277.71% since February 11, 2018 and is uptrending. It has outperformed by 277.71% the S&P500.

Cronos Group Inc., formerly known as PharmaCan Capital Corp., is a principal investment firm. The company has market cap of $3.59 billion. The firm seeks to invest in companies either licensed, or actively seeking a license, to produce medical marijuana pursuant to Canada's Marihuana for Medical Purposes Regulations . It currently has negative earnings. The firm typically invests in companies based in Canada.

https://whatsonthorold.com/2019/02/11/what-next-for-cronos-group-inchare-nasdaqcron-stock-after-decrease-in-shorted-shares/

Should You Buy Cronos Group Stock on the Dip?
Cronos' decline was based on news that has very little impact on the firm's overall growth story

By LAURA HOY, InvestorPlace Contributor  http://bit.ly/2BpeX8d

Canadian marijuana company Cronos Group Inc. (NYSE:CRON) has had a bumpy year … Despite a sharp pullback that took the share price down nearly 20% this week, Cronos Group stock has gained 64% over the past year.

Should You Buy Cronos Group Stock on the Dip?

The marijuana firm has been riding a wave of positive sentiment within the pot industry, but is it time to take profits?

CRON stock took a nosedive earlier this week, but the stumble could be an overreaction that offers investors a great entry point.

What Happened?

CRON stock has been hurt by two major factors this week — the first being an overall pullback in marijuana stocks following news that Aphria (NYSE:APHA) was fending off a takeover attempt from Green Growth Brands.

APHA’s board of directors refused an offer from Green Growth, and rightly so considering the offer price came in substantially lower than APHA’s share price. The news hurt the industry as a whole and therefore took CRON stock lower; however, the event has absolutely no impact on the company’s growth potential or business operations.

While the APHA news had an impact on Cronos stock, it was a downgrade from GMP Securities on Wednesday that can be blamed for the majority of its decline. GMP analyst Martin Landry lowered his rating on the stock from “buy” to “hold” with a price target of $18 (USD). Landry cited the stock’s 110% rise over the past year as reason for the downgrade, saying that the stock’s valuation had simply risen too far on too little news.

However, GMP still has a positive outlook on the stock. Landry said the firm’s tie-up with Altria Inc. (NYSE:MO) will be beneficial to CRON’s future and that he continues to believe in Cronos’ management team.



The Case for Cronos Stock
So, was the 20% decline warranted?

If you’re a believer in the marijuana market and Cronos’ position in the space, then no, the decline was heavily overdone … If you look carefully at the reasons behind CRON stock’s nosedive, you’ll notice that none of them have anything to do with the company’s overall growth story, operations or future. So, if you were considering jumping on board in 2019 but never pulled the trigger, now could be an excellent chance to take a position on a pullback.

Cronos is likely to benefit in the year ahead from the $1.8 billion investment from Altria. Not only will the company be able to speed up its growth using the influx of cash, but Altria has a lot of experience operating within a regulated industry, which should help guide Cronos through the ever-growing legal marijuana industry in the years ahead.

Speaking of legal marijuana — Cronos Group stock is also likely to experience a few major upswings in the year ahead as legalization continues to spread across America and into Europe. The ever-growing marijuana market is the prime reason to invest in marijuana stocks like Cronos, and there’s likely more good news on the horizon for the industry.

The Downside
On the other hand, CRON is still expensive even with the recent pullback. The company isn’t profitable yet but still trades at a valuation that will give you a nosebleed. Plus, the fact that the marijuana industry changes so rapidly means that Cronos Group stock, as well as its peers, are likely to see a great deal of volatility in the short term. This week’s sudden slide is a great example of what investors can expect.

Landry had a point — CRON could be out over its skis at its current price. If you already own CRON stock, you might want to think about taking profits and waiting for a better entry point.

The volatility that comes with the marijuana market isn’t going anywhere, and this won’t be Cronos’ last major swing. That means it might be worth waiting for CRON to make its way back toward $20 per share before jumping in with both feet.

As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.

Investors Focused Mover: Cronos Group Inc. (CRON)

 February 11, 2019  Jennifer Medina  0 Comments CRON, Cronos Group Inc.

Cronos Group Inc. (CRON)’s Stock Price Update:

Cronos Group Inc. (CRON) stock value sealed its day with loss -8.73% and wind up at the price of $19.55, its 52 week- top value and replaced 281.84% from its 52 week-lowest price value. Throughout its last bargaining session, Stock negotiated with the total exchanged volume of 30.9 million shares. The average volume stands around 14.92 million shares. The average numbers of shares are traded in a security per day, during the recent 3-month period. The stock has relative volume of 2.11. Relative Volume (often times known as RVOL) is an indicator that tells traders however current volume is compared to the past volumes over a given period. It’s reasonably a sort of microwave radar for the way “in-play” a stock is.

ATR value of company was 1.85. Average true range (ATR) may be a volatility symbol that shows what proportion associate quality moves, on average, over a given timeframe. The indicator has various uses for day traders. It aids within the placement of orders, has intraday tendencies, and might be used as a tracking stop loss. The common true vary could be a moving average, typically fourteen days, of truth ranges. It is a “New ideas in Technical commerce Systems.”

To review the CRON previous performance, look at its past history, which highlighted below: During last 5 trades the stock fixed almost -6.05%. During last 30 days it showed the change of 50.62%. During last 3 month it remained at 116.02%. During last 1 year it moved at 170.36%. Along with these its (YTD) year to date performance is standing at 88.16%.

In Canada Industry, Cronos Group Inc. (CRON) have 178.71 million outstanding shares currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders. The company have shares float of 156.29 million. Floating stock are often outlined because the total range of shares of a stock that square measure obtainable for commerce in Associate in Nursing open market. It is often calculated by subtracting the total of owned shares (shares that don’t seem to be in public traded) and restricted stock (non- transferable stock of a company) from the company’s total outstanding shares.

Canada based company, Cronos Group Inc. (CRON)’s latest closing price distance was 109.39% from the average-price of 200 days while it maintained a distance from the 50 Day Moving Average at 46.90% and 15.43% compared with the 20 Day Moving Average.

The stock price weekly volatility remained at 14.85% while volatility is standing at 10.24% for the month. Volatility may be an applied math live of the dispersion of returns for a given security or market index. Volatility will either be measured by victimization the quality deviation or variance between returns from that very same security or market index. Commonly greater the volatility, the riskier the safety.

https://nasdaqclick.com/2019/02/11/investors-focused-mover-cronos-group-inc-cron-2/

Jennifer Medina

Jennifer Medina-