|Bid||5.79 x 0|
|Ask||5.80 x 0|
|Day's Range||5.23 - 5.86|
|52 Week Range||4.11 - 11.29|
|Beta (3Y Monthly)||5.03|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jun 13, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||10.36|
CALGARY , Sept. 20, 2019 /CNW/ - Inner Spirit Holdings Ltd. ("Inner Spirit" or the "Company") (ISH.CN), a Canadian company establishing a national network of retail cannabis stores under its Spiritleaf brand, today announced the opening of its newest franchise store in Drayton Valley, Alberta which represents the Company's 30th operating location. The Drayton Valley store is located at 5105 50 Street. Please visit www.spiritleaf.ca for operating hours and additional information.
[Editor's note: This story will be updated each week with new stocks and analysis. Please check back often for Mark's latest take on marijuana stocks.]Unfortunately technical analysis has a bad reputation. However, it is probably well deserved. Most of the technical analysis of marijuana stocks that I see is dubious at best and downright terrible at worst. Many analysts mindlessly try to identify patterns without really understanding what they are supposed to mean. Some analysts are even proponents of bizarre techniques like Gann Theory and Elliot Waves. My belief is that these methods are better suited for a Twilight Zone episode than for making money in real markets.In financial markets, there are certain price levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, stock prices are always doing one of three things. They are either going up, going down or staying the same. You can see this by looking at almost any chart. If you understand technical analysis and apply it correctly, you can identify these important levels and trends.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 Dividend Stocks to Buy for a Recession Knowing where these levels are will help you profit. For example, suppose you want to buy a stock if it gets down to $5 a share and then sell it if it rallies to $10. If there is support around the $5.50 level, the stock could fall to $5.50 and then rally to $10. Because you didn't know where the support was, you would have missed out on a significant profit for 50 cents. Marijuana Stocks With Levels to Watch: Aphria (APHA)Aphria (NYSE:APHA) manufactures and sells medical cannabis in Canada and internationally. It currently has a market cap of about $1.5 billion.APHA stock has looked rough recently, down more than 7% in the past week. This is probably sympathy pain due to Aurora Cannabis (NYSE:ACB) being downgraded at Stifel from "hold" to "sell."If it continues to head lower, there will probably be some support around the $6 level. This is where the two most recent lows were on Aug. 15 and Aug. 27.If it gets oversold it may have a tradable rally off of the level. The key is to not try to catch the bottom. Bottoms are typically more volatile than tops. This is because tops are created by hope while bottoms are created by fear.A better strategy could be to wait until the downtrend is broken before buying it. In other words, buy it after it starts to rally. You won't get the low trade, but the risk-reward ratio is better than trying to guess where the exact bottom is. Hexo (HEXO)Hexo (NYSE:HEXO) produces, markets and sells cannabis. The current market cap is about $985 million.When a stock is rallying, the forces of demand are in control. When a stock is selling off, the forces of supply are in control. A reversal pattern shows a change of this leadership.From Aug. 28 through Sept. 6, buyers controlled the market. The stock rallied every day. Then the action on Sept. 9 formed a reversal pattern. It has dropped by about 10% since then.The up days are blue and the down days are red on the chart. On Sept. 9, the stock opened at the day's high. The buyers were in control that morning. * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars Then the stock sold off over the course of the day and closed at the lows. This action means that the forces of demand have run out of steam and the forces of supply have taken over. These dynamics are what forms a reversal pattern on the chart. Cronos (CRON)Cronos (NASDAQ:CRON) grows and sells marijuana. Its current market cap is $3.8 billion.CRON stock continues to trend sideways above support around the $10.75 level. It has been trading in the same range for about one month. If the support at the $10.75 level breaks, it will probably become a resistance level.How does this happen? Why would a level that was support become resistance? Consider the following.The investors who bought a stock at a support level are feeling good when it bounces and they are making money. But then when the level breaks and the stock goes lower, they are now looking at a loss. They tell themselves that if the stock rallies back up to that level, they will sell it so that they can get out of it without losing any money. They place their sell orders at the level, and this supply of stock is what creates resistance. The Green Organic Dutchman (TGODF)The Green Organic Dutchman (OTCMKTS:TGODF) engages in the provision of medical cannabis solutions. It currently has a market cap of around $500 million.Aurora Cannabis was a large holder of TGODF stock. It recently announced that it sold its position of 28.8 million shares to a consortium of Canadian Banks. This caused TGODF to drop by about 10%.There is a chance that the consortium, or at least members of it, have been selling the shares they acquired in the block transaction. This could be what is forcing the stock lower. If this is the case, then when this selling comes to an end, there is a good chance that we will see a meaningful rebound. * 7 Momentum Stocks to Buy On the Dip TGODF is also oversold. The last time that it was this oversold, in July, a large rally followed. The term "oversold" refers to momentum. It is a measurement of where the stock is today versus where it was X many days ago. When this number reaches an extreme to the downside it is considered to be oversold. Aurora Cannabis (ACB)Aurora is a Canadian-based company that grows and sells medical cannabis products. It currently has a market capitalization of about $5.4 billion.ACB stock has been crushed over the past week. It has dropped from $6.50 to $5.30. Last week the company reported a loss for the fourth-quarter that was larger than expected and revenue that was short of estimates. Because of this, Stifel Nicholas downgraded the stock from "hold" to "sell."When the stock dropped, it found support around $5.50. This was expected because it is where the recent lows were. The next morning, the level broke and the stock traded lower. The $5.50 level may become a resistance level now.If it continues to trade lower, it may find support around the $5 level. This is because this level was where the lows were in December. It is also an important level psychologically. If ACB is oversold when it reaches that level, there is a good chance that it will be a low-risk buying opportunity. Medicine Man Technologies (MDCL)Medicine Man Technologies (OTCMKTS:MDCL) provides cultivation consulting services to cannabis growers. The current market cap is about $133 million.MDCL stock seems to be failing at resistance after becoming overbought.The levels around $3.90 were the top in April, and then again in May and June. This is the reason why there is resistance at this level.Like oversold, overbought refers to the momentum of the stock. When this number reaches an extreme to the upside, it is considered to be overbought. * 7 Tech Stocks You Should Avoid Now This is an important dynamic to understand about markets. When they are oversold and get to support, they tend to rebound. When markets are overbought and get to resistance they tend to sell off, as is the case here. Kushco Holdings (KSHB)Kushco Holdings (OTCMKTS:KSHB) sells packaging products and solutions. It currently has a market cap of about $270 million.On Sept. 11, the company reconfirmed its guidance and discussed what it believes are positive developments. Apparently shareholders were not impressed. The stock has been in a free-fall since then.I do not know when (or if) the selloff will come to an end. A clue that may signal that this is about to happen could be extremely large volume. This would be a sign of capitulation and would be a short-term bullish dynamic for the stock.Capitulation means that the sellers are sick of the misery the stock is causing and they just want to get out. They tell their brokers to sell it and they don't even care about the price. They want it to go away. This usually results in very-large-volume trading. This could be a short-term bullish dynamic.At the time of this writing Mark Putrino did not have any positions in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Stocks to Buy for a Recession * 10 Companies Making Their CEOs Rich * The 7 Best S&P 500 Stocks of 2019 So Far The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
As many investors know, hype doesn't equal profits when it comes to growing a portfolio in cannabis stocks. Having said that, let's look at Innovative Industrial Properties (NYSE:IIPR), Scotts Miracle-Gro (NYSE:SMG) and Hexo (NYSE:HEXO) in order to avoid the buzz and cultivate better-looking possibilities off and on the price chart. Let me explain.Cannabis stocks. The market's potential is massive to say the least. But for those that have taken stakes in the group's most popular names such as Canada's top producer Canopy Growth (NYSE:CGC), former capitalization top dog Tilray (NASDAQ:TLRY) or Cronos (NASDAQ:CRON), losses have likely followed.Without getting too deep into the minutiae, early enthusiasm and momentum with most cannabis investments has adjusted to today's more difficult realities. Cannabis stocks face massive layers of regulatory red tape as they attempt to tap into new markets. And many of these companies are up to their eyeballs in debt while vying to be competitive.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars Eventually, there will be winners among cannabis producers. And for those investors that hang on, the returns on the right pick could be enormous. I get it. At the same time, buying the proverbial picks-and-shovel plays and the companies already quietly making money for investors, off and on the price charts, makes for an even stronger blend of exposure to cannabis stocks. Cannabis Stocks Buy: Hexo (HEXO)Hexo is our first "buy" recommendation. HEXO stock is also the most speculative of our three cannabis stocks to buy. The company is looking to cash in on the niche edibles and cannabis-infused beverages market, and has stronger odds of success courtesy of its partnership with Molson Coors (NYSE:TAP) which allows it access to the beverage giant's many resources.On the price chart, HEXO stock is unique among its peer group. Despite this year's steep correction in cannabis stocks, shares of Hexo have maintained a weekly uptrend. The last few weeks have been spent trying to rally out of a well-supported, small double-bottom pattern.With pattern confirmation in hand and a supportive-looking stochastics setup, my recommendation in HEXO is to buy shares today. I won't put a price tag on the upside potential of this more speculative play. But placing an exit below support, if required, is smart business. Scotts Miracle-Gro (SMG)Scotts Miracle-Gro is the second of our stocks to buy. If you've ever been in a Home Depot (NYSE:HD) or Lowe's (NYSE:LOW) -- or mowed a lawn for that matter -- SMG stock is familiar with its lawn and gardening products. Scotts is also profitable, offers a dividend of 2.3% and happens to nicely positioned within the cannabis industry as its largest hydroponics supplier.Technically, today's investors are able to buy SMG stock as it pulls back into a high consolidation pattern. The price action has taken on the characteristics of a high handle formation after shares broke out of a large cup-shaped base to new highs, but began to retreat following a gain of around 8%. * 7 Momentum Stocks to Buy On the Dip With SMG stock just now registering an oversold stochastics condition, my advice is to put shares on your radar to purchase on a second move back above the prior high and above the cup breakout level of $105.23. Place an initial stop-loss below $99. Innovative Industrial Properties (IIPR)Innovative Industrial Properties is the last of our three cannabis stock buys. IIPR stock is a landlord for many of the sector's producers. Like SMG stock, IIPR is profitable and as a real estate investment trust, investors are paid regular income of 3.4%. But please, don't think of IIPR as a widows-and-orphans investment like Coca-Cola (NYSE:KO). These shares are volatile.Currently, IIPR stock's aggressive profile has taken shares out of a symmetrical triangle pattern and into a deep correction of around 40% at the recent low. Again, this cannabis stock is not for the faint of heart.The good news today is that shares are oversold and have signaled a bullish stochastics crossover. And with IIPR confirming a weekly candlestick reversal pattern after loosely testing key Fibonacci support, this cannabis stock is ripe for the picking in conjunction with a blended stop-loss below $80.90.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post 3 Cannabis Stocks to Buy Today appeared first on InvestorPlace.
HEXO Corp (TSX: HEXO) (NYSE: HEXO) announced Monday that its master grower Agnes Kwasniewska was chosen as the first-ever Master Grower of the Year at the Grow Up Conference and Expo Awards. "We are extremely proud to see her great work recognized by her peers in the cannabis industry," St-Louis said in a statement.
The markets are hanging out in the red today, spurned on by fears about a spike in oil prices. Drone strikes against oil facilities in Saudi Arabia sent the oil market scrambling -- both Brent and WTI crude prices are up well over 10% today.Source: Shutterstock The timeline for getting the damage repaired is likely to be counted in weeks, not days. And in the meantime, oil stocks are on everyone's mind. The United States Oil Fund (NYSEARCA:USO) pushed to gains of over 13% on the day. It would be better news if it didn't come with headlines of international unrest.But as many readers focused their attention on the oil stocks, here are a few of the other articles InvestorPlace readers found particularly interesting today:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aphria Stock Needs Better FriendsThere's a tendency in the markets for some stocks to occasionally fall in sympathy with one of their close peers. And James Brumley thinks that's exactly what's happening with Aphria (NYSE:APHA) stock.Aphria flexed on earnings, and notable to many investors was the fact that APHA actually turned a profit. That's something plenty of its marijuana stock brethren are still working toward. You'd think that would launch APHA stock to the head of the pack, but its rally mostly faded with the rest. * 10 Recession-Resistant Services Stocks to Buy Brumley does point out that the amount of Goodwill on the books may be a problem, but overall says, "Right or wrong, Aphria stock is guilty by association. When most other names in the business are losing ground due to valuation concerns, the selling can be rather indiscriminate." Understanding How Hexo Stock Values Its InventoryAs we wait for Hexo (NYSE:HEXO) to report earnings, Mark Putrino wants to make sure you understand one of the most interesting and potentially misunderstood parts of a marijuana stock's valuation -- how it values its inventory.As Putrino explains, "Four variables are considered to determine the valuation. These are the average selling price, the yield per plant, the stage of growth and the amount of wastage."The average selling price and stage of growth are pretty straightforward, but wastage and yield are estimated, and if you want to invest in Hexo stock, it's important to understand how they make those estimates.(For what it's worth, he also mentions that Hexo is "very forthcoming" with the calculation and the numbers it uses.) Vital Levels to Watch for Nio StockA couple of InvestorPlace writers took a look at Nio (NYSE:NIO) today, both considering it for a short-term trade.Nio stock is on a bit of a roll lately, and Bret Kenwell says that with a potential bottom in for the Chinese auto market, Nio could be ready for more gains. As he put it, "The technicals are starting to behave better for Nio stock; now it needs the fundamentals to improve as well."Nicolas Chahine, meanwhile, thinks if the stock can push past resistance, there are more gains to be found. "The NIO stock price is now headed into resistance because of a price cluster near $3.50 per share," he wrote. "If I'm not yet long the stock, I would wait until the bulls are able to push prices above that before chasing it. "It's also important to remember that Nio has earnings coming up on Sept. 24.That's it for today's commentary. Please feel free to drop us a note at firstname.lastname@example.org to let us know what we got right and what we got wrong. Happy investing! More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post InvestorPlace Roundup: Aphria Stock Needs Better Friends appeared first on InvestorPlace.
The award recognizes professional cannabis growers whose dedication to their craft consistently produces top quality crops for the marketplace. The nominees are growers that set the bar for others to match.
Shareholders of Hexo (NYSE:HEXO) are not happy. And for good reason. Since April, the HEXO stock price has dropped from over $8 per share to current levels around $4.50. Like many other companies in the cannabis industry, Hexo is facing some challenges.Source: Shutterstock If you invest in marijuana stocks, you should have a basic understanding of how they value their inventory of cannabis. For example, say a company has 10 pounds of cannabis in storage and they believe that it is worth $10 a pound. Then the value is $100, and this is considered to be part of the overall value of the company.Now suppose that the company says a pound of cannabis is worth $12. This makes the value of the cannabis that is in storage increase by 20% to $120. This in turn increases the overall valuation of the company.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Tech Stocks You Should Avoid Now The next question is, how does the management know that it is worth $12? Where does this number come from? Is it based on the price that it costs HEXO to produce a pound? Or is it the cost of what it sells for? Is it based on an index? Did they just pull it out of the air?You need to be very careful because different companies calculate the numbers in different ways and some can be quite subjective. Therefore, two different companies could be giving identical assets different valuations. HEXO Management's Discussion and Analysis of Recent EarningsThe management's discussion and analysis of the company's most recent earnings release describe in detail how HEXO determines a value for the cannabis it holds in inventory.Four variables are considered to determine the valuation. These are the average selling price, the yield per plant, the stage of growth, and the amount of wastage.The average selling price, at $4.95 a gram, is obtained from retail sales. That seems pretty straightforward. The yield per plant isn't so easy. Plants can yield between 62 and 125 grams. That's a big difference.How do they decide on a number to use? The report explains that the numbers are obtained from an analysis of historical results.The stage of growth is obtained through subjective estimates. Wastage is also estimated and it can be between 0-30%, depending on the stage of the harvest cycle. This a significant difference. Bottom Line on Hexo StockAs you can see, a big part of the valuation of a company's inventory can be determined by subjective estimates. I am not suggesting that Hexo Corp is doing anything wrong. In fact, they seem very forthcoming about their processes and methods.I just believe that you should have an understanding of these dynamics when you are considering investing in Hexo stock or any other company. You should be aware when things are valued based upon subjective estimates.If the highest price that you could sell your house at is $1 million, it is worth $1 million. You may say to yourself, "I think my house is actually worth $1.1 million because I like the paint job." But does this increase the value of your house by 10%? Probably not.If you want to gain a deep understanding of a company's valuation, subjective estimates such as these are things that you should consider.At the time of this writing, Mark Putrino did not hold any positions in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post What Every Investor Should Understand About Hexo Stock appeared first on InvestorPlace.
With Biden strongly opposing full-scale legalization, President Trump could turn around things. President Trump might support medical marijuana legalization.
For the cannabis sector, there has been a grueling bear market since April or so. Even the tier-one companies have suffered major double-digit declines, such as Canopy Growth (NYSE:CGC), Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY).Source: Shutterstock Then again, the run-up that came before the downtrend was parabolic as the sentiment got excessive. Let's face it, there was too much optimism about the potential impact from the legalization of the Canadian market. It also did not help that there were problems with the supply chain as well as black market activity. So when things did not pan out as expected, a painful correction was inevitable.But I do think this is presenting some interesting opportunities in the space. For example, take a look at Hexo (NYSE:HEXO) stock, which has been cut in half during the past six months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe company is certainly well positioned to benefit from the long-term potential in the Canadian market. Keep in mind that Hexo dominates the Quebec market, with a 30% share.What's more, the company continues to make strides with production. Hexo has aggressively expanded its footprint to about 1.8 million square feet, with annual production of 150,00 kilograms. * 7 Discount Retail Stocks to Buy for a Recession M&A has also been critical. To this end, Hexo shelled out $197 million for Newstrike Brands Ltd, which added to annual capacity by about 150,000 kilograms.Yet the focus on production has not been about quantity over quality. Consider that the company has been a heavy investor in innovation and R&D, which has allowed for higher margin offerings.According to Hexo CEO Sebastien St-Louis, on the latest earnings call: "We now have 25 PhDs on staff. They're focused on developing new and innovative products for the market, best-in-class technology for our 'Powered by HEXO' experiences. Building on our innovative technology is critical in building brands." Strategic Alliance With Molson Coors BrewingI think a critical factor for Hexo stock is its partnership with Molson Coors Brewing (NYSE:TAP). No doubt, there are the benefits of leverage from the broad capabilities of global distribution, marketing expertise and logistics. Such factors will likely prove essential in breaking through the noise in the marketplace.The deal with TAP will also allow Hexo to benefit from the "Cannabis 2.0." This refers to October 17th, when it will be legal to sell cannabis extracts in Canada (although the selling will not be allowed until mid-December because of the requirement to get a permit). The market is likely to be significant, with the potential for $1 billion+ in spending next year.To prepare for this, Hexo and TAP have been jointly creating a variety of products, such as beverages, gummies and vapes. In other words, there could be a nice catalyst for revenue growth. For example, in regards to fiscal year 2020, Hexo is projecting that the top-line will hit a hefty $400 million and that there will be a doubling in fiscal Q4. Bottom Line On The Hexo Stock PriceGiven the consistent downtrend in Hexo stock, it's understandable that investors want to back off. There are legitimate fears that this could be the proverbial "falling knife."Yet it really does look like the sentiment for Hexo stock has gotten to overly negative levels. Besides, the growth story looks intact, especially with Cannabis 2.0, and the company has strong production and a solid position in the Canadian market. So for investors with a long-term perspective, I think Hexo stock looks like an interesting play at current levels.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post The Molson Coors Deal Will Be a Game Changer for HEXO Stock appeared first on InvestorPlace.
I wrote about Hexo (NYSE:HEXO) stock last month. I emphasized that Hexo's acquisition of the failing Canadian cannabis company Newstrike would increase its burn rate.Source: Shutterstock Nothing has happened since then to change my mind. In fact, I believe the stock could fall further. Here's why:This month HEXO will report its quarterly and annual results for these periods to July 31. The bottom line is this: HEXO stock could fall after the earnings are released. Here is why:InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Hexo's acquisition of Newstrike will increase the combined companies' cash burn rate. * Investors want to see a coherent plan on how Hexo's sales goals will lower that cash burn rate.Hexo closed on the all-stock deal to buy Newstrike on May 24. I estimated last month that Hexo paid about $158 million US ($211 million CAD) for Newstrike.I noted that Newstrike had cash flow losses of $39 million CAD in 2018. Newstrike has likely lost at least 50% more than that amount this year including about $15 to $20 million CAD in cash burn in Q4. * 10 Recession-Resistant Services Stocks to Buy So if you add in HEXO estimated cash losses of $15 million to $20 million CAD in Q4, the two combined probably burnt $40 million CAD in real cash flow together. Newstrike's Appeal: Its Cash BalanceOne of the reasons why HEXO bought Newstrike was because the latter came with a pile of cash and securities. In my previous article on Hexo stock, I estimated based on public filings that Newstrike had about $86 to $90 million CAD at the close of the acquisition on May 24.Combined with HEXO's own cash and securities of $189 million CAD in April, the two together probably have $230 million CAD after their Q4 cash burn losses. The combined debt balance is at least $40 million, so the net cash is probably below $200 million CAD.I estimated that the two combined are burning cash at a rate of about $100 million a year. This means they have really no more than a year or so of cash burn. After that Hexo has to raise equity or debt to finance further losses. Will Higher Sales Reduce the Cash Burn?Hexo's management has stated that the two companies will reach $400 million CAD in one year up from a combined $50 million CAD run rate as of April. Investors should look carefully at management's presentation for its Q3 results to see if they have a clear plan to reach this goal.But that may not be a positive for the Hexo stock. Unless HEXO can get control of the two companies' cash burn rates, dramatically increasing sales will only exacerbate the combined cash burn. What to Do?Short sellers have been buzzing around Hexo stock. Shorts already account for 11% of Hexo stock outstanding, according to Yahoo! Finance.They are looking for red meat. They will see an increased burn rate and lower cash balance, along with a higher debt ratio in Q4. This will push HEXO stock lower. Getting to $400 million CAD with a higher cash burn rate will only pour fire on Hexo's stock.A coherent plan should be presented by management in its Q3 results as to how HEXO will reach its $400 million CAD sales goal in one year.That plan has to also show how there will be a lower cash burn rate as a result - or at least an estimated cash burn rate that trends lower towards profitability. For example, if its estimated gross margin stays low, working capital needs will only increase operating cash flow losses. How is management going to handle that?If these concise plans are not presented, expect short sellers to continue to push the stock down after the earnings are released.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs the Total Yield Value Guide which you can review here. The Guide focuses on high total yield value stocks and was launched on August 30. Subscribers during September receive a 20% discount, plus a two-week free trial. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Hexo Stock Could Fall After Its Earnings Release appeared first on InvestorPlace.
The past four months have been worrying for Canadian marijuana firm Hexo Corp (NYSE:HEXO). Hexo's stock price went from over $8 per share at the end of April to just under $4 at the end of August as market uncertainty and concerns about the marijuana market in general weighed on the sector.Source: Shutterstock Just a few months ago, pundits were recommending Hexo stock left and right, pointing to the firm's strategic partnerships and promise for the future as growth catalysts, but today the share price is languishing around the $4 mark. Downtrend for Hexo StockWhat happened this summer to dull the shine on HEXO? The answer to that is both complicated and simple -- absolutely nothing. Hexo stock hasn't suffered any major setbacks that would warrant a 50% decline. Instead, the firm has been caught up in an overall downtrend in cannabis stocks as investors search for safer investments to combat rising uncertainty.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Battered Tech Stocks to Buy Now Marijuana stocks are inherently risky no matter how bright a future they appear to have. That's because the industry itself is still developing and there are still a lot of regulatory hoops to jump through. No one knows where the pot industry will be in a year -- there's a chance we won't see any forward movement at all, bringing in an added layer of risk. On top of that, Hexo is a small-cap stock which, again, is inherently risky. Investors are looking to big names with massive cash coffers that pay secure dividends right now because they aren't sure where the market is heading. Simply put, that's the opposite of what you're getting with Hexo stock and so the firm has been sitting on the sidelines in recent weeks. Is Hexo Stock a Value Play?It's at this point that many investors like myself might be asking whether or not now is a good time to buy Hexo stock. There's a lot to like about HEXO's future -- the company is controlling around 30% of Quebec's marijuana market, a figure that's unlikely to move much over the next few years. If Canada's recreational marijuana market grows as expected over the next few years, Hexo has the potential to serve around 10% of the nation's cannabis market. Canada isn't the only place HEXO has the potential to expand either. The firm has aligned itself with Molson Coors Brewing (NYSE:TAP), which provides a clear path toward greater international exposure. Not only that, but HEXO's partnership with TAP underscores the firm's commitment to cross-industry partnerships.HEXO's plans to make cannabis-infused beverages with TAP is just the beginning to a much larger trend in which marijuana products gain mainstream traction. I believe Hexo's commitment to expanding into other industries is a smart one as the marijuana market's limitations and growth avenues are still unclear. HEXO Earnings on the HorizonHexo stock is due to release its fourth quarter results on Sept. 12, and the earnings report has the potential to push the share price higher. Revenue is seen coming in around 25.5 million Canadian dollars, an increase from the year-ago quarter. Management also said the company is planning to ramp up its annual production capacity to 108.000 kilograms, which it says will prepare the firm for Canada's second wave of legalization in October.The upcoming earnings call should also provide more insight into Hexo's beverage line Truss as well as the firm's other cannabis ventures like cosmetics, wellness products, and vapes. Bottom LineThere's a reason investors are wary of Hexo stock right now -- it's risky. Although I'd argue that HEXO is probably one of the best marijuana bets on the market, I'm going to wait this one out on the sidelines.Not only is the wider market suffering from turbulence due to macroeconomic concerns, but the marijuana market itself is still on very unstable footing. If you can stomach the risk, I think Hexo is a great way to play the cannabis market and I believe in the firm's strategic vision. However, be prepared for some volatility as regulations and skittish investors continue to plague HEXO's stock price.If you do buy Hexo stock, I'd be cautious about the size of your position, especially with earnings on the horizon. As of this writing Laura Hoy didn't hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Whatas Ahead for Hexo Stock With Earnings on the Horizon appeared first on InvestorPlace.
The summer of 2019 was a period of malaise for the cannabis sector, and unfortunately that meant a selloff in Hexo (NYSE:HEXO) stock, whether it deserved the downward price pressure or not. As I see it, adverse developments from well-known names like Canopy Growth (NYSE:CGC), and Aurora Cannabis (NYSE:ACB) induced a panic that spilled over into the rest of the cannabis sector.Source: Shutterstock Since many outlets predict Sept. 12 earnings, it might be a smart idea to wait and see which way the Hexo stock price goes before taking a position. It's also fine to start a position if you believe in the recovery of cannabis stocks.Hexo in particular has great potential as a turnaround story.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Hexo Is Growing by Leaps and BoundsI recall when Hexo reported its third-quarter 2019 earnings, and it's no exaggeration to say that the results were outstanding. For one thing, Hexo completed its acquisition of Newstrike Brands during that quarter and in doing so, increased its production space to an astonishing 1.8 million square feet and its estimated annual cannabis production capacity to 150,000 kilograms. * 10 Stocks to Sell in Market-Cursed September Sebastien St.-Louis, the CEO and co-founder of Hexo, also delighted shareholders with the projection that the company will earn $400 million in revenues during fiscal year 2020. He also forecasted that Hexo will double its net revenues in the fiscal Q4.I've heard analysts refer to 2019's market as "Cannabis 2.0" or "Legalization 2.0," and Hexo is a prime example of what they're referring to. The company is not only bigger and better than it was before. It's also proactively preparing for the future. Hexo's agreement with Molson Coors (NYSE:TAP) to sell cannabis-enhanced beverages is a perfect example of how the industry is moving forward. Analysts' Projections on HEXOAn upcoming earnings announcement means that analysts are coming out of the woodwork to share their opinions on HEXO stock. For the fourth quarter of 2019, analysts project that Hexo will announce revenues of $25.5 million CAD. They expect the company to sustain a loss of 5 cents per share for the Canadian version of Hexo stock.These are very modest expectations influenced by the dismal performance of the cannabis sector as a whole. I don't see any reason why the actual results won't exceed analyst expectations. And I wouldn't be surprised if the Hexo stock price retraces upwards. My Takeaway on Hexo StockDon't get me wrong. Hexo is a much smaller company than CGC, ACB and other famous brands in the legalized cannabis space. I do not recommend taking a large position in HEXO stock shares, even after the upcoming earnings announcement. There are future developments that could create volatility for the entire cannabis market.The event that immediately comes to mind is the day when Health Canada will allow an array of cannabis products (edibles, extracts, creams, etc.) to be consumed. That day is slated for Dec. 16, but I won't be shocked if the legalization date gets delayed for one reason or another.Therefore, I will advise that prospective HEXO buyers exercise due caution. Accumulate shares gradually, prepare for possible downside in the price, respect your stop-losses if you use them and always keep your position sizes reasonable.Despite my warnings, I remain bullish on the Hexo stock price as I see the company as proactive. It's expanding quickly and preparing for a new and exciting era in legalized cannabis.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post You Won't Find Better Value Than Hexo Stock in the Canna-business appeared first on InvestorPlace.
Quebec-based Hexo (NYSE:HEXO) is due to report earnings on Sept 12. In Canada, pot edibles and beverages will become legal on Oct 17, one year from the original legalization of cannabis in the country. Industry watchers are referring to this new era in Canadian pot markets as "Legalization 2.0." So what does that mean for HEXO stock?Source: Shutterstock Around this time last year, Canadian cannabis stocks had started rallying in anticipation of the nationwide adult-use legalization. Therefore, the hype surrounding the launch of pot drinks in Canada is likely to give a bit of fizz to HEXO stock, too.In 2019, most cannabis stocks have been extremely volatile. And cannabis companies have lost significant value since October 2018. Summer months saw a further correction in marijuana stocks. And the share price of many of these stock, including Hexo, have come down to more attractive levels. Now that the earnings season is upon us, let's look at what may be next for the HEXO stock price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What to Expect From Hexo Stock's EarningsHexo produces, markets, and sells cannabis in Canada. It is a leading supplier to Quebec's retail outlets. The group serves the adult-use market under the HEXO brand, while it serves its medical cannabis clients through the Hydropothecary brand.In June, HEXO stock reported subdued Q3 fiscal 2019 earnings results. Total net sales came in at CAD $13 million. Over 90% of Hexo's cannabis sales during Q3 were tied to the adult recreational market. * 10 Stocks to Sell in Market-Cursed September When Hexo stock reports Q4 earnings, investors are likely to look at the company's revenue mix. In the last quarter, over 80% of total sales came from dried flower. In recent months, the price of dried flower has been decreasing and consumers are not brand loyal. If this trend continues, investors may decide that HEXO stock is overvalued.Most pot stocks are burning through loads of cash and losing money as if there is no tomorrow. Cash flows are far from predictable. In Q3, Hexo posted a CAD $2.22 million loss from operations. In the upcoming earnings report, Wall Street will likely pay attention to Hexo stock's cash flow.It is important to remember that weed is an agricultural commodity. In late 2018, during the early weeks following legalization, Canadians spent about $40 million on legal weed. However, since then sales haven't really held up. Instead the figures have come in much less robust than initially anticipated.In other words, there are possibly too many players in Canada, a relatively small market. Annual Canadian sales are not likely to exceed $4 billion. The black market is still thriving in Canada.No one knows when (or if) federal legalization will happen in the U.S. And other international sales outside these two countries are not big enough to act as a substantial catalyst for the share price of Hexo as well as other pot stocks.Could consolidation be a way forward most of these cannabis producers like Hexo stock? Hexo Stock Has an Important PartnershipNew products are not expected to hit shelves till Dec 16 as license holders will have to give Health Canada 60 days notice if they intend to sell them. And Hexo may become one of the first companies to capitalize on this development.On Aug 1, 2018, Hexo and Colorado-based Molson Coors (NYSE:TAP) announced a joint venture (JV), called Truss. As the company that makes Coors beer, Molson Coors is the third largest brewer globally with a market cap of about $12 billion.Truss is a stand-alone entity with an independent management team. Molson Coors owns a controlling 57.5% interest in the JV. Hexo owns the remaining 42.5%. The new JV is currently developing a range of non-alcoholic cannabis drinks to be marketed in Canada as of mid-December.Upcoming Canadian regulations will strictly limit what types of consumables can be produced and marketed. For example, manufacturers cannot legally combine pot and alcohol in products. In labeling, companies cannot use alcohol-related terminology, such as "chardonnay" or "IPA" either.Hexo management has recently said that the company will "have a very large supply… [and] be able to meet the demand of the marketplace." Truss is also likely to sell CBD-infused drinks in the U.S. as of 2020.The upcoming rollout of edibles and drinks is likely to help expand margins of Hexo stock. Prior to the JV announcement in Aug. 2018, Hexo share price was hovering around $3. Therefore, I expect this price level to act as support for HEXO stock in the months to come. So Should Investors Buy Hexo Stock in September?I am expecting an up leg in most of the cannabis stocks this fall as investors get ready for Legalization 2.0 in Canada. In fact, most pot stocks have started September on a high note. For example, on Aug 27, Hexo stock saw an intraday-low of $3.71. And yesterday, it hit an intraday-high of $4.75.Therefore, Hexo shares may initially rally further around the earnings report. And a potential investor could miss out on some profits for not having bought into the HEXO shares prior to the earnings.If you are considering investing in Hexo, you may want to start building a position between the $4-$4.5 levels, and expect to hold the stock for several years.$5 level would be likely to act as strong resistance. Only after the stock is able to push through and stay above $5 can Hexo shareholders begin to relax for the longer-term prospects.If you already own Hexo shares, you may also consider hedging your position with at-the-money (ATM) covered calls. Such a hedge would not only enable you to participate in an up move but also provide some downside protection. HEXO stock price is currently $4.40 and a Oct 18 expiry $4.50 strike call would sell for 40 cents. * 7 Best Stocks That Crushed It This Earnings Season However, in the long run, I am of the camp that the rich valuations in this commodity-based consumer market may continue take a hit in the coming months, especially after the hype of Legalization 2.0 ends. In addition, the longer-term technical charts, especially the trend lines and support and resistance levels in most pot stocks, including Hexo, are telling investors to exercise caution.As of this writing, Tezcan Gecgil holds covered call in TAP stock (Sep 16 expiry). More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Should Long-Term Investors Buy Hexo Stock Ahead of Earnings? appeared first on InvestorPlace.
Aphria (NYSE:APHA) stock rose nicely last month. After falling to as low as $5.02/share, Aphria stock rallied in early August on strong earnings. APHA has since declined from $7.45/share to around $6.95/share.At its current valuation, APHA stock trades at a discount to Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC). But does this make Aphria stock a value play? APHA has a tarnished reputation. But the company's recent earnings success could be a signal that Aphria's future prospects remain strong.Let's take a closer look at APHA stock, and see if now's the time to buy. InvestorPlace - Stock Market News, Stock Advice & Trading TipsSource: Shutterstock A Closer Look at APHALike Aurora, Aphria has focused on the medical side of cannabis. The medical space is less "cool" than the recreational side. But it offers a more stable opportunity. Similar to Aurora, Aphria has focused its efforts on international markets. With the Canadian market still suffering a supply glut, geographic diversification is a smart move. * Dorian's Impact on the Markets APHA has had the most success in Europe, particularly Germany, and in Latin America. After acquiring CC Pharma, Aphria is now one of three companies with a cultivation license in Germany. With a solid foothold in that market, Aphria is doubling down on that market.Overall revenues for the quarter that ended in May were C$128.6M. That was up from C$73.6M in the prior quarter. Gross profits doubled from C$17.3M to C$36M.After these improvements, APHA has high hopes for fiscal 2020. In FY20, the company anticipates net revenue of between C$650m-C$700m. Its guidance calls for adjusted EBITDA of between C$88m and C$95m. That means APHA is getting close to profitability.But APHA stock has many red flags. As InvestorPlace contributor Josh Enomoto detailed on August 15, the company suffered a big scandal, as a short seller accused the company' top executives of looking to personally profit from acquisitions. As a result, the company's CEO and co-founder were ousted. The company's use of figures such as "Adjusted EBITDA" and other non-GAAP figures is also worrisome. True profitability could be many years off for APHA.With this in mind, investors may want to assess the company's projections with a critical eye. But has this scandal created a buying opportunity? Let's see how the valuation of Aphria stock stacks up to its peers. APHA Trades at a Lower Valuation Than Its PeersWhen comparing marijuana stocks, I typically use Enterprise Value/Sales ratio. For now, that remains the most clear valuation metric. Based on this ratio, Aphria stock is undervalued. The company's current EV/Sales ratio is 9.5, representing a sharp discount compared to its peers:Aurora Cannabis: EV/Sales of 46.1Canopy Growth: EV/Sales of 36.2Cronos (NASDAQ:CRON): EV/Sales of 98.7Hexo (NYSE:HEXO): EV/Sales of 40But this discount could be the canary in the coal mine. The company has had asset write-downs in the past, and APHA may have to write down its $500m acquisition of Nuuvera . Given that the market cap of Aphria stock is $1.7 billion, that is a serious impairment charge. And as with other pot stocks, the dilution of APHA stock is a concern. To fund its operations, APHA issued convertible debentures. These debentures are convertible into 37.3M shares of Aphria stock. This dilution could minimize the gains of Aphria stock. The Bottom Line on APHA Stock: High Risk and a Huge OpportunityAphria stock sells at a discount to its peers. But the company's tarnished reputation is a concern. Be cautious before buying into the company's elevator pitch. However, the company is focused on a more stable market, medical marijuana, than some of its peers. Moreover, tts success in Germany has given it a blueprint for success. That success could be duplicated in other European markets.The cannabis industry remains overvalued. Negative investor sentiment could push marijuana stocks down further. It is tough to call a bottom. But marijuana stocks could soon be selling at more reasonable valuations. If that scenario unfolds, APHA may become a solid play. Keep APHA on your radar, but be cautious about buying Aphria stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post In Battered Cannabis Space, Aphria Stock May Be Worth a Look appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) announced September 4 that it sold its 10.5% stake in Green Organic Dutchman Holdings (OTCMKTS:TGODF) for gross proceeds of CAD $86.5 million or CAD $3 a share. Owners of Aurora Cannabis stock will be pleased to learn the sale resulted in a 50% internal rate of return. Source: Shutterstock In addition, it still holds warrants to buy another 16,666,667 shares of TGODF that are exercisable at $3 share. With the stock currently trading around $3, it's going to be a while before ACB could cash in those warrants. In the meantime, Aurora has more than $40 million in pre-tax profits to put to work. Here's where I think the owners of ACB stock will get the most bang for their buck.InvestorPlace - Stock Market News, Stock Advice & Trading Tips These Pretzels Are Making Me ThirstyI couldn't resist the Seinfeld reference but the one area where Aurora has been slow to the party is in the cannabis-infused drinks market. * 7 Stocks to Buy In a Flat Market Sure, it won't be able to legally sell these drinks in its Canadian home market until mid-December of this year, but that's left it with plenty of time to organize a game plan for the drinks market. It's disappointing that it hasn't.Instead, Aurora is going to focus on vape pens and concentrates for its growth beyond the dried flower. "You're going to start seeing people shift over from the illicit market, the minute vape pens become available. And we have a head start on that," Aurora Chief Corporate Officer Cam Battley said in June. Given the recent health concerns about vaping that have cropped up in 16 U.S. states suggests that the failure to have a backup plan could hurt Aurora in the near term. Long term, I'm sure the vaping issues will get sorted, but there is definitely more investigation to be done. However, Aurora's lack of cannabis-infused drinks is a big reason why I'm (pardon the pun) high on both Canopy Growth (NYSE:CGC) and Hexo (NYSE:HEXO), whose Big Alcohol partners bring knowledge and distribution capabilities to the table, making them attractive cannabis investments in my opinion. Don't get me wrong. There's a lot to like about Aurora. Here's what I said about it in August:"Aurora Cannabis continues to use its industry-leading size in both Canada and abroad to capture a big part of the global cannabis market. The fact that it doesn't have a U.S. business plan at the moment doesn't mean it won't enter the market in the future.""Furthermore, while it doesn't have a huge strategic partner, if it continues to implement innovative ideas such as cultivating outside, I don't think it will have a problem attracting a huge strategic investor." Why Not Partner With Coke?Back in 2018, Aurora held talks with Coca-Cola (NYSE:KO) but those seemed to have fizzled out. However, the fact that it recruited billionaire Nelson Peltz, whose Trian Fund Management has several high-profile consumer goods investments, to help guide the company through its ongoing growth suggests that it might reconsider a partnership with a company such as Coke in the future. In my opinion, the owners of Aurora Cannabis stock would be well served by the company reconsidering its stance on cannabis-infused drinks. I can say with certainty that my age group (mid-50s) are far more inclined to try THC/CBD drinks or edibles than they are vapes or dried flower. If you haven't smoked cigarettes your entire life or for many years, why would you start with weed? You wouldn't. The Bottom Line on Aurora StockYou can't be all things to all people. That I get. So, it makes sense that Aurora's focused its efforts on products that have done well in the U.S. states where recreational pot is legal. However, tastes can change. Few have delivered cannabis-infused drinks that taste good. If Canopy or Hexo can break through that barrier, I'm confident they'll roll those drinks out across the U.S. as more states and the feds legalize pot. * 7 Triple Threat Growth Stocks to Buy for the Long Term In the meantime, all Aurora can do is hope that they don't. A better plan would be to join the party. It's got 40 million reasons to do so. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Aurora Cannabis Should Spend Latest Cash Infusion on Infusions of Its Own appeared first on InvestorPlace.
It's becoming a sad, familiar scene in the broader marijuana industry. Like so many other sector players, Hexo (NYSE:HEXO) started out this year on fire. But as we flipped the pages of the calendar, investors started to see less appeal for botanical goods. As a result, the Hexo stock price has charted a severely bearish trend channel since late April.Source: Shutterstock In my opinion, some of the negativity is unwarranted. Whether we like it or not, cannabis stocks tend to move in sympathy with each other. That's great when we have collectively bullish news, such as Canada legalizing recreational weed. But negative events, such as the CannTrust (NYSE:CTST) controversy, have hurt the Hexo stock price.In early July, Canadian health officials discovered that CannTrust illegally grew cannabis in unlicensed rooms. That set off a wildfire within the industry, which so far culminated in CannTrust firing its CEO. While this incident has nothing to do with HEXO, cannabis companies eagerly seek legitimacy and credibility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUnfortunately, this incident was incredibly unhelpful for Hexo stock. Since the incident came to light, the company's equity has plunged roughly 16%.That said, let's face facts: Hexo stock has enough of its own problems on paper to justify its volatility. For instance, while its fiscal third-quarter earnings results weren't terrible, they failed to meet analysts' expectations for per-share profitability. And this is where the honeymoon phase has dried up for HEXO: Wall Street wants substantive results, and they're not getting it. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off Naturally, many folks are saying to hold off on buying Hexo stock until this situation improves. Hexo Stock Primed to Advantage Key Demographic RealityPersonally, I'm speculating on HEXO, so I'm biased. Nevertheless, I can see the wisdom in a patient approach. For example, my InvestorPlace colleague Todd Shriber recommended waiting out shares until they stabilize.This is very sound advice. If we were talking about blue chips, I would say the same thing ad nauseum. However, we're talking about the cannabis industry. It's unlike any other sector because we don't know legal marijuana's ceiling.If we see federal legalization of weed in the U.S., it can skyrocket the Hexo stock price, along with peers like Aurora Cannabis (NYSE:ACB) and Cronos Group (NASDAQ:CRON). But if Canadian legalization is the industry's peak, well, I would have made one of my dumbest moves yet.Logically, most cannabis companies are banking on the U.S. legalization potential. Politically, I believe momentum favors the optimists. Thus, I'm not overly concerned about HEXO's expansionary efforts because I believe their efforts will be rewarded in the long run.But along the lines of marijuana being an unprecedented market, we must also appreciate their target consumer base: millennials. While most of the country supports marijuana legalization, millennials overwhelmingly (74%) support the cause.More importantly for the Hexo stock price, evidence indicates that millennials are narrative-driven investors. CNBC calls it emotional investing. But the bottom line is that young people are guided by purpose and principles. Therefore, their investments are more likely to reflect their lifestyle or personal ethos.And that truly augurs well for HEXO. I'll concede again that on paper and against traditional financial metrics, the company doesn't look too hot. But really, who cares? I don't mean to sound flippant, but their target audience is youthful investors, not stodgy, "by the book" baby boomers. Look at HEXO Through a Young Person's LensLately, bearish stories about legal marijuana have a recurring theme: don't jump aboard because the industry is unproven and unstable. They may throw in specific details about the financial statements, such as negative income trends. * 7 Best Tech Stocks to Buy Right Now All of these things and more are true for Hexo stock. But again, bear in mind that the underlying company's target audience is young people. They're least likely to care as much about the financials. Instead, they're looking for a convincing narrative.HEXO has that in spades. Moreover, shares have a cheap ticket price. That's also important for younger millennials, who are burdened with college debt and other life expenses.Don't get me wrong: Hexo stock is still an incredibly speculative and risky name. But its potential for an upswing isn't nearly as ludicrous as you might think.As of this writing, Josh Enomoto is long HEXO. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Here's How Millennials Can Save Hexo Stock a¦ and Maybe its Cannabis Peers appeared first on InvestorPlace.
I've followed the cannabis space for a long time now, and in my years observing marijuana stocks, I've come to one very important conclusion: there are a lot of pot stocks out there, but only a handful of them will turn into long-term winners. Most of them will fall to zero in the long-run.Source: Shutterstock This is an important observation to keep in mind when thinking about HEXO Corp (NYSE:HEXO) stock. HEXO is yet another Canadian cannabis company which wants to take over the world with its cannabis-infused products. Also, like many of its peers, HEXO is selling investors the pipe dream that it can be a very important player in what looks poised to become a multi-hundred billion global cannabis market. * 7 Best Tech Stocks to Buy Right Now That may happen. If it does, those who buy Hexo stock now will be making the investment of a lifetime.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut Hexo stock probably won't make that dream come true. Instead, the most likely outcome for HEXO isn't billion-dollar profits. Rather, the company will probably get squeezed out of the cannabis market by larger and better-equipped players.That's why, time and time again, I've told investors to stay away from Hexo stock. I'm reiterating that recommendation today. Until the company gives investors some tangible and convincing reason why it will be a long term winner in the cannabis market, investors should stay away from HEXO stock. Lots of Players, Very Few WinnersHere is an accurate, common-sense concept that investors tend to forget every time a new growth market emerges. Early-stage growth markets usually attract many companies. but late-stage growth markets usually have only a few winners.When growth markets are in their early stages, everyone and their best friend wants to get into the space because it has so much long-term growth potential. As a result, a bunch of companies emerge in early-stage growth markets. But the markets cannot support all that supply, since demand is finite.Consequently, as the market matures, a few companies become large players, and they proceed to wipe-out everyone else in the space. As a result, 95% of companies in early=stage growth markets disappear, while 5% turn into long-term winners.That has happened time and time again throughout the course of U.S. history.Think about the emergence of the internet space. Many internet companies like Boo.com, Webvan, Pets.com, Kozmo, Geocities emerged initially. But of the thousands of dot-com companies that were launched during the late 1990s, only a handful - like Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOG) - survived and thrived over the long-term.Or think about the emergence of the blockchain in 2017-18. The shares of any company that said it was somehow involved with the blockchain went parabolic. Now, even though bitcoin has staged a meaningful recovery, many of those "blockchain companies" are no longer relevant. For example, take a look at a three-year chart of Overstock.com (NASDAQ:OSTK).All new growth markets go through the same cycle. Investors get euphoric about them. A bunch of companies emerge in an effort to capitalize on that euphoria. The shares of all those companies rally as though they will all turn into long-term winners, but only a few achieve the dream. The rest suffer a painful demise. The Cannabis Industry Is No DifferentThe unfortunate reality is that the cannabis industry will endure a cycle that is similar to what the internet space and the blockchain industry experienced.That means that of the hundreds of cannabis companies out there today, only a select few will become winning investments over the long-term.Right now, Hexo stock is not well-positioned to become one of the sector's long-term winners. The company sold less than 3,000 kilograms of cannabis last quarter, far less than the 10,000-plus kilograms per quarter that the industry leaders sold. Last quarter, HEXO's's sales volume rose 9% versus the previous quarter. That's unimpressive relative to the double-digit-percentage growth rates that most other cannabis companies are delivering. In Q2, its net revenue actually dropped quarter-over-quarter, and its net loss widened . Its balance sheet, with about $130 million in cash, is very small relative to the multi-billion dollar balance sheets of Canopy (NYSE:CGC) and Cronos (NASDAQ:CRON).In other words, there's nothing terribly special about Hexo stock which will enable it to become a long-term winner.Unless the company does develop such a catalyst, HEXO stock price will most likely end up at zero. The Bottom Line on Hexo StockStay away from HEXO for the foreseeable future. At this point, HEXO appears to be an unattractive company in the right space. But that could all change, and quickly. If it does change, Hexo stock price will turn into a long-term multi-bagger.But until that happens, HEXO stock is facing enough risks to warrant staying on the sidelines for the time being.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Why I Continue to Stay Away From HEXO Stock appeared first on InvestorPlace.
Hexo (NYSE:HEXO), like so many other cannabis plays lately, has seen better days. Its equity is struggling for upside as sellers continually bat prices lower and lower. Just four months ago, the Hexo stock price was trading for more than $8 per share. Now at $4, shares are at a very critical juncture on the charts.Source: Shutterstock If it holds, perhaps HEXO bulls can start repairing some of the technical damage. It will take time to unwind some of the longer and stronger downtrends. But in order to do so, it would be most helpful if this vital level of support would hold.Let's look at this important level and see whether Hexo stock is a worthwhile long currently down more than 50% from its recent highs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Trading Hexo StockHexo stock is problematic for the bulls because it has a number of downtrends currently in place. The 20-day and 50-day moving averages (DMAs) are both trending lower, while various lower highs (blue lines) are also present. * 7 Deeply Discounted Energy Stocks to Buy In order for HEXO to be considered healthy on the long side, it needs to fight through some of these bearish trends. Keep in mind, these trends played a large part in driving HEXO down to the levels it's at now.However, my concern isn't so much around resistance. Instead, I'm worried about support holding. At the $3.75 level, Hexo stock has twice found a bevy of buyers over the last few months. Click to EnlargeWhen the stock tested this mark in July, shares rallied to $4.95 -- up 32% -- in just a few weeks. Currently at the 20 DMA now, HEXO has a chance to continue pushing higher. If it can, it will start to repair some of the chart's technical damage. Although it does little good if HEXO can't hold those gains and stay above some of these negative trends.So, what's the bottom line on the technical front?We're seeing the stock start to press into some of its resistance marks. The further it can go, the better. Over the 20 DMA, and it would be constructive to see this moving average turn into support rather than act as resistance. Above the 20 DMA and downtrend resistance, and the 50 DMA is the next target.Most importantly though, bulls need to keep the Hexo stock price north of $3.75. Below could cause a flush to the December lows. Final Thoughts on HEXOFor cannabis stocks, the struggle is real. Many names -- be it Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB) or Cronos Group (NASDAQ:CRON) -- have all seen their share prices under significant pressure.As awesome as it is to see revenue growth rates in the 1,000% range so far this year, we must keep a few things in mind. First, through the first two quarters of Hexo's fiscal year, the company has generated less than $20 million in sales. For a company with a $1.08 billion market capitalization, that's a problem.With that low of revenue, it's not hard to see how Hexo generates an operating and net loss for its business. That also means it generates a free cash flow deficit. When a company has a negative draw on its cash each quarter, that doesn't mean it's a dud. But it does mean it needs to have a strong balance sheet to weather the fundamental decline.While the company's cash and current assets have declined year-over-year, its liabilities are small in comparison. That goes for both current and total liabilities. With current assets of almost $200 million ($129 million of which is in cash), current liabilities of just $35.4 million doesn't cause much concern.No matter how investors cut it though, an approximately $1.1 billion valuation for a stock generating about $10 million in quarterly revenue is a high valuation. And when the valuation is this high, we need to see the technicals behaving better. Until we do, investors need to be cautious with Hexo stock.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Hexo Stock Is Teetering on a Must-Hold Level appeared first on InvestorPlace.
Hexo (NYSE:HEXO) stock is down 20% year-to-date. This is while the S&P 500 is up more than 10% and the SPDR S&P Biotech ETF (NYSEARCA:XBI) is flat. So clearly, investors have shied away from buying HEXO stock specifically.Source: Shutterstock This is not necessarily alarming because investors are already nervous from extraneous factors. Wall Street has good reason to be hesitant to buy even proven stocks right now with so much uncertainty is looming. So they are not rushing into risky ones either.During such uncertain times, stocks like HEXO, which are relatively frothy don't get bid up. If investors are nervous they usually prefer buying strong fundamentals not hopium. Since it sells at 270 time its sales, the Hexo stock price has a lot of forward potential baked into it -- even down here.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Trading HEXO StockSo, under such uncertain conditions, I would only trade HEXO from a tactical vantage point. And that's the opportunity we will study today.HEXO stock is down 50% since the end of April. Clearly the bears are in control of it, but there is hope for the bulls. Last week when it was under severe selling pressure, it held the July bottom. So as long as the HEXO bulls can maintain the higher-low trend, they will have an opportunity to regain control of the price action. This is also happening inside a pivotal zone and those are usually supportive.To do that, HEXO stock price needs to rise above $4.50. This is a moving target so I consider it more of a range rather than a hard line in the sand.If the buyers are able to do this then HEXO could run another $1 from there. This would almost be the halfback retracement of the whole correction from $8.20 per share. * 7 Deeply Discounted Energy Stocks to Buy Since I deem this opportunity as tactical, it also means that the trade should have tight stops. This would eliminate the temptation of turning a trade into an investment.However, if traders know the company and expect its fundamentals to eventually blossom then this same opportunity here would also be a good long-term entry point. But in either case and with so much uncertainty, it is best to do it in stages and not a full position all at one.There is a technical caution from the weekly chart. The HEXO stock price pattern is expanding and testing the lower ends of the range. If the trend line breaks then they could target $3 per share. While this is not the obvious scenario unfolding, it is one that exists.The bottom line is that Wall Street is on edge so they won't have a lot of appetite to buy iffy stocks. HEXO is one that would likely need the general market help to find footing and recover higher levels. If it does then I'd trail profits near $5.50 then again at $6.30 per share.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post Hexo Stock Is Down -- But Not Out appeared first on InvestorPlace.
How far off is HEXO Corp. (TSE:HEXO) from its intrinsic value? Using the most recent financial data, we'll take a look...
CALGARY , Aug. 28, 2019 /CNW/ - Inner Spirit Holdings Ltd. ("Inner Spirit" or the "Company") (ISH.CN), a Canadian company establishing a national network of retail cannabis stores under its Spiritleaf brand, today announced that the Company's subsidiary, Spirit Leaf Inc., has entered into Exclusivity Agreements with two individuals that have been selected to apply for licences to operate cannabis retail stores as a result of the Alcohol and Gaming Commission of Ontario's (the "AGCO") lottery conducted on August 20, 2019. "These lottery winners were seeking a strong partner to work with so we are very pleased Spiritleaf has been selected to help them establish and operate their stores.
CALGARY , Aug. 27, 2019 /CNW/ - Inner Spirit Holdings Ltd. ("Inner Spirit" or the "Company") (ISH.CN), a Canadian company establishing a national network of retail cannabis stores under its Spiritleaf brand, today announced it has filed its interim Financial Statements and corresponding Management's Discussion and Analysis for the quarter ended June 30, 2019 . The filings are available for review on the Company's SEDAR profile at www.sedar.com as well as on the Company's website at www.innerspiritholdings.com. "The lifting of the moratorium on cannabis retail store licences by Alberta Gaming, Liquor and Cannabis (the "AGLC") during the second quarter was precisely the springboard needed for Spiritleaf to advance its business strategy.
On August 24, a Forbes article discussed Andrew Yang’s 2020 election campaign rolling out limited edition marijuana-themed merchandise.
Marijuana legalization is a major issue in the cannabis industry. Marijuana is still a Schedule 1 drug under the Controlled Substances Act in the US.