Connect with us

MJ Stocks

This is Why Hexo Corp (NYSE:HEXO) Is A Buy

Published

on

HEXO Corp

Hexo Corp (NYSE: HEXO) is one of Canada’s success stories with significant growth potential. A buyout of Newstrike Brands for $263 million underscores the company’s credentials as it seeks to become an industry leader in the multi-billion sector.

Hexo Corp Price Analysis 

The stock has also taken off in the market on huge volume, in what is turning out to be an inflection year, after the underperformance of last year. A 100% plus spike in share price, since the start of the year, could as well signal the stock’s break out credentials.

With the stock currently trading in a steep uptrend, further gains could be on the offing given the underlying fundamentals that continue to fuel the upside action.  For starters, the company is fresh from inking a multi-year extraction agreement with Valens that will see it supply a minimum of 30,000kg cannabis and hemp biomass.

A spike in Hexo share price also comes on the heels of an analyst at Bank of America initiated coverage of the stock with a ‘buy’ rating. A rally past the $7 a share resistance level has since opened the door for the stock to continue edging higher in continuation of the long-term bull trend.

HEXO Daily Chart

Pullbacks have so far emerged as entry positions from where bulls have come back and continued to push the stock higher. Conversely, any pullback, back to the $7 support level could trigger further upside action, as has been the case for the better part of the year.

About Hexo Corp

Through its subsidiaries, Hexo Corp produces markets and sells cannabis and its derivatives in Canada. The company also offers dried cannabis under the Time of Day and H2 lines. The products are offered under the Hexo and Hydropothecary brand names.

Hexo Corp Buy Rating

Shares of Hexo have been on the move in recent weeks on Bank of America analyst, Christopher Carey, reiterating that the stock is a strong ‘buy’ in response to recent developments. According to the analyst, the stock is a top pick in the cannabis sector; thus the $10 price target.

According to the analyst, Hexo is an ideal pick in part because of its low valuation supported by an annualized revenue of $40 million. The company has also inked cannabis supply agreements with four provincial agreements that could be worth billions of dollars in revenue over the next few years.

Hexo moving with speed to take advantage of the growing demand for cannabis products is another development that justifies the buy rating according to the analyst. In addition to positioning itself for growth in Canada, the company has also set sights on international markets in pursuit of growth opportunities.

Cannabis Production Capacity Boost

The development of a 350,000 square foot facility in Greece underscores the company’s push for growth in the European market. Once the production facility is up and running, the company should be able to supply medical marijuana markets across the EU.

The acquisition of Newstrike Brands is poised to more than quadruple Hexo cannabis cultivation space to 2.3 million square foot. With the large cultivation space, the company should be able to ramp up cultivation and production capacity, to cater to the growing cannabis demand back at home and abroad

Hexo has already inked a deal that will see its supply Valens GroWorks, a minimum of 30,000 kg of cannabis and hemp biomass a year.

“HEXO is pleased to work with a quality organization like Valens. On the eve of edibles and concentrate legalization in Canada, this agreement will allow our company to bring an expanded offering to market, creating innovative products to deliver exceptional cannabis experiences to consumers,” said James McMillan, Vice-President of Strategic Business Development at HEXO Corp.

A balance sheet with CA$224 million in working capital leaves the company well financed to pursue growth initiatives, ideal for generating shareholder value.  As it stands, Hexo remains well positioned to start producing positive cash flow as it continues to ramp up sales on improved cannabis production.

Bottom Line

Hexo is an exciting fundamental investment as it continues to send shockwaves in the cannabis sector. The acquisition of Newstrike Brands has all but reinvigorated the company’s growth metrics given the synergies of expanded cannabis cultivation and production at stake.

The stock is a solid buy on pullbacks after the recent spike as it continues to outperform the overall market.

For the latest updates on HEXO and other MJ stocks, sign up below!

Disclosure: We have no position in HEXO and have not been compensated for this article.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

MJ Stocks

Is Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) A Good Bet Right Now?

Published

on

Neptune Wellness Solutions

There is no doubt 2019 was a tough year for the hemp/cannabis businesses. However, there are a few hemp/cannabis stocks that still managed to make their investors proud. Neptune Wellness Solutions Inc (TSE:NEPT)(NASDAQ:NEPT) is one of those stocks. Investors who put their bet on Neptune at a time like this saw their investment increase 130% by July of last year.

Neptune Wellness Solutions is already off to a strong start in 2020. The stock has gained more than 15% in the past week alone. Looking at how Neptune has positioned itself in the hemp/cannabis market, you cannot dispute 2020 is shaping up to be a great year for the stock. Then you notice that Neptune insiders are deeply invested in the stock. Insiders own more than 17% of all shares in the company. The company’s market cap of $280 million shows that insiders alone have sunk $48 million in the stock.

You are about to find out more reasons why Neptune Wellness Solutions looks to be a good pick right now. But first, here’s what you should know about the company we’re discussing.

About Neptune Wellness Solutions

Neptune Wellness Solutions has been around since 1998 and is headquartered in Laval, Canada. It is engaged in the extraction, formulation, and packaging of value-added cannabis products for both Canadian and global markets.

This is shaping up to be Neptune’s year for a number of…

Continue Reading

MJ Stocks

Is Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) A Smart Pick?

Published

on

Tetra Bio-Pharma

Investors will remember that 2019 wasn’t a great year for cannabis stocks, especially Canadian stocks. Issues from uncertainty over Canada’s national elections to shortage of cannabis retail stores in Ontario greatly weighed on Canadian cannabis stocks last year. These problems are largely out of the way and investors can now spot cannabis stocks with a promising outlook in 2020. Tetra Bio-Pharma (CVE:TBP) (OTCMKTS:TBPMF) is one play poised for a big breakout in 2020 as its drug products go on sale.

Tetra Bio-Pharma is one of the most promising cannabis stocks in 2020 and investors have really warmed up to the stock. At $0.50, Tetra stock has already gained more than 60% year-to-date. But that is just the beginning and we feel there is a great story to tell here. First, however, it is important for investors to understand the company we’re discussing.

About Tetra Bio-Pharma

For investors who may have just come across Tetra Bio-Pharma for the very first time, this is a Canadian cannabis company. It is focused on developing cannabis-based drugs for a variety of conditions, including cancer.

Tetra Bio-Pharma about to begin commercializing its drug products

As a drug company, Tetra Bio-Pharma is insulated from many challenges that face conventional cannabis companies. For example, companies that make adult-use cannabis products must cope with cutthroat competition in the market. Moreover, Canadian cannabis companies have Continue Reading

MJ Stocks

Why Investors Are Warming Up To Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF)

Published

on

Fire & Flower Holdings

The disastrous 2019 taught investors the importance of carefully screening cannabis stocks for great picks that can withstand industrywide shocks. That explains why investors are warming up to Fire & Flower Holdings Corp (TSE:FAF) (OTCMKTS:FFLWF) in 2020.

Fire & Flower Holdings has positioned itself to take full advantage of the recently expanded cannabis market under Cannabis 2.0. Investors are realizing that FFLWF is one pick that can make a huge difference in their cannabis portfolio. Fire & Flower Holdings has already gained more than 25% year-to-date, a testament to the strong investor interest in the stock in 2020.

About Fire & Flower Holdings

Fire & Flower Holdings is a Canadian cannabis company. It operates as a cannabis product retail chain. It operates a network of dozens of cannabis retail outlets in Canada. FFLWF currently has licenses to operate cannabis retail stores in Alberta and Saskatchewan provinces. In addition, it runs a cannabis distributor business in Saskatchewan.

Investors will no doubt remember that 2019 was a tough year for the cannabis sector, with a widespread collapse of many cannabis stocks big and small. That shows why in 2020 investors are looking for cannabis stocks that can deliver excellent returns and make them forget the pain of the past year. FFLWF has emerged as one of the favorite cannabis stock picks for investors early on in 2020. There are several reasons behind that and here are…

Continue Reading

MJ Stocks