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.
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.
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.
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Disclosure: We have no position in HEXO and have not been compensated for this article.
Terra Tech Corp (OTCMKTS: TRTC) A Bounce Back Play As Net Loss Narrows And Gross Margins Expand
Terra Tech Corp (OTCMKTS: TRTC) has retraced lower ever since it clocked 2019 highs at the end of the first quarter. The stock has crumbled under soaring bearish pressure. Amidst the steep pullback, the stock is a potential bounce-back play as it is currently trading at the lower end of a tight trading range.
Terra Tech Price Analysis
A plunge to the lower end of the $0.63 to $1 trading range leaves the stock in a precarious position. A plunge lower could elicit further selling pressure while a bounce back could result in the stock making run for this year highs.
In our view, the stock could bounce back on investors reacting to a string of positive developments that affirm the Company’s prospects. For starters, Terra Tech is fresh from launching a legal cannabis delivery services as it continues to pursue growth opportunities in California.
The Company is also fresh from delivering impressive financial results that indicate gross margin expansion as net loss from operations continues to narrow. The sale of Blum Desert is another development poised to strengthen the company’s financial position.
Terra Tech commencing cannabis sales to the adult use market should continue to excite investor’s, ideal for fuelling an upswing in the stock’s price action activity. With the stock appearing to have hit the floor after the recent pullback, a correction higher could be in the offing at the lower end of the trading range.
Namaste Technologies Inc (OTCMKTS: NXTTF) A Bounce Back Play On Robust Revenue
Namaste Technologies Inc (OTCMKTS: NXTTF) has had to contend with wild price swings, as investors reacted to delays in the filling of audited financial results and ousting of Sean Dollinger as the CEO. That could soon change, as the Company has come through and filled results that affirm robust revenue growth.
Namaste Technologies Price Analysis
However, concerns over widening net loss could hurt the stock’s sentiments in the market, at a time when it is in dire need of, groundbreaking catalysts to avert further slides. While the stock has bottomed out, it remains engulfed in a long-term bear trend.
The descending trend line could attract short selling pressure on the filling of negative news that arouse concerns about the Company’s long-term prospects. A spike to the $0.65 level essentially means the stock is at a critical resistance level.
Failure to rally and find support above the resistance level could elicit some form of selling that could see the stock trading sideways. Immediate support on any pullbacks from current highs is seen at the $0.40 mark.
A sell-off followed by a close below the $0.40 mark could result in Namaste Technologies resuming its downtrend, as has been the case for the better part of the past year. Conversely, a rally followed by a close above the $0.66 mark should pave the way for the stock to make a run for the $1.20 mark, seen as the next…
Cannex Capital Holdings Inc. (OTCMKTS: CNXXF) A Long-Term Play Despite Price Slump
A strategic merger with 4Front coming on the heels of Pure Ratios holding acquisition affirms why Cannex Capital Holdings Inc (OTCMKTS: CNXXF) prospects can only get better despite the recent price slump. The transformational events expand the Company’s operations into six U.S states signaling push for market value in the burgeoning cannabis sector.
Cannex Price Analysis
While Cannex has taken a significant hit in the market, it is still up for the year after an excellent start that saw it rally by more than 200%. The stock has since pulled lower in what appears to be a correction phase.
The ongoing pullback has since exposed the stock to a crucial support at the $1 a share level. A breach of the support level would leave the stock susceptible to further drops probably back to the $0.80 mark, a critical technical level.
For the stock to resume its uptrend, it first needs to rise and stabilize above the $1.20 mark, the immediate resistance level. The stock rallying and finding support above the $1.2 mark would open the door for bulls to fuel a rally back to 52-week highs.
Cannex is a diversified company that leases real estate properties and sells supplies to cannabis cultivators. The Company also offers financial services as well as branding and IP services to licensed cannabis operators. It is also focused on premium indoor cultivation extraction and branding of edible…