It’s been a wild ride in 2020. The greatest bull market ever turned into the fastest bear market ever, and the worst recession since the Great Depression was seen as the coronavirus turned into the COVID-19 pandemic. Throw in trillions of stimulus dollars and the fastest race for curing or vaccinating against COVID-19 and there are parts of the economy doing great as the stock market hit all-time highs once more.
It turns out that the economic recovery has been very selective. The all-time highs in stocks are reflective of how many of the companies are winning, though frequently at the expense of other companies. 24/7 Wall St. has tracked a group of companies that have simply refused to participate in the stock market upside. We looked beyond the obvious pain points within oil and gas and within travel, and many stocks are just refusing to participate in very much upside.
In an effort to avoid companies unknown to the market, companies with market caps of $500 million to over $1 billion were preferred. If they fell short, that’s because things have gone so wrong. On top of energy and travel, we also screened out the companies in biotech or emerging medical technology that may have seen a trial failure because those companies may have little to no future.
24/7 Wall St. would remind its readers that so-called cheap value stocks often are cheap for a reason. Some of these companies have the pandemic to blame, but some of the value stocks are also value traps. While there are nine prominent stocks featured here, some runners-up also have been included.
Aurora Cannabis Inc. (NYSE: ACB) may still have a $530 million market cap, but at $4.38 a share, this stock is effectively at a 52-week low and is down about 90% from a year ago. With profitability concerns mounting, it no longer seems to matter that the Canadian cannabis company is vertically integrated in marijuana. With much of the sector in trouble, Tilray Inc. (NASDAQ: TLRY) gets a runner-up nod here, even if it was up 5% on the day, because its shares were down 70% year to date, and the cannabis stock sector’s implosion has been nearly unilateral. Even the ETFMG Alternative Harvest ETF (NYSEARCA: MJ) is barely above its closing lows in March.
Cinemark Holdings Inc. (NYSE: CNK) finds itself in an inoperable position. With Regal shutting operations, it seems there is little to no hope to draw movie viewers back in. Even those who would brave the pandemic and go sit in a theater find themselves with the dilemma that all the movies that have been filmed for large audiences have been delayed again and again. Cinemark is down about 75% year to date and still has a $990 million market cap. Rival AMC Entertainment Holdings Inc. (NYSE: AMC) is not in much better shape, and its $439 million market cap is still down nearly 50% so far this year.
Empire State Realty Trust Inc. (NYSE: ESRT) certainly is not the only office building real estate investment trust (REIT) that is feeling no love in 2020. What is hurting so bad here is that it owns and runs office and retail properties in Manhattan and the greater New York City metro area. Its flagship property is the famous Empire State Building. Companies are not exactly feeling an urgency to run back into their offices in New York City, so the retail landscape is brutal there, and many people in the country feel the local politicians are destroying the city. The REIT even has had to suspend its dividend, and it is hard to judge whether the liabilities and lack of cash flows can support the $1.9 billion market cap today. Empire State Realty’s share price is still lower than when the March lows were seen, and the stock price is down over 50% in 2020.