|Bid||2.3700 x 2200|
|Ask||2.3800 x 2200|
|Day's Range||2.2800 - 2.4300|
|52 Week Range||2.2800 - 8.4000|
|Beta (3Y Monthly)||4.68|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Hexo Corp. shares took another bath on Monday, after Seaport Global downgraded the stock along with market leader Canopy Growth, in a note that advises investors to switch out of Canadian cannabis stocks and into U.S. multistate operators.
MKM Partners analyst Bill Kirk cut his stock price target on Aurora Cannabis Inc. on Monday and said there is still some optimism in the stock “to shake and trim.
“We see a headwind for the Canadian cannabis market, ahead, based on sizable industry supply,” Seaport Global analyst Brett M. Hundley said.
(APHA) will be the first marijuana company to report quarterly earnings since last week’s cannabis stock selloff. Its fiscal first-quarter earnings announcement is scheduled for Tuesday, after the market closes. Aphria stock (ticker: APHA) is down about 17% so far this year through Friday’s close at $4.71, while the S&P 500 index has risen 19%.
SAN FRANCISCO , Oct. 11, 2019 /PRNewswire/ -- Hagens Berman notifies HEXO Corp. (NYSE: HEXO) investors of the firm's investigation of possible violations of federal securities laws. The firm urges HEXO ...
My suspicion surrounding the stated reason for former CFO Mike Monahan leaving Hexo (HEXO) has been confirmed, as almost immediately afterward the company announced a revenue warning, as well as withdrawing its financial outlook for fiscal 2020.It's certain that Monahan changed his mind after going through the financials and taking into account the weakening sentiment in the cannabis market. I think he was looking forward to participating in an exciting sector that was about to take off, and rather, not soon after taking the CFO job, found the exact opposite.The company would never confirm that one way or another, and in reality, it no longer matters. Why Monahan left has little impact on the performance of the company going forward. That said, losing the high-profile CFO does weaken the stature of Hexo at a time when it would have helped.What matters going forward is how long it'll take Hexo to recover, and how it'll deal with cash burn as revenues continue to plummet.The macro cannabis pictureFor cannabis companies based in Canada, investors need to include the slow rollout of retail outlets in their models. More than any other factor, this has weighed on the performance of companies, and will continue to do so for at least two or three quarters.The reasons for this is not only the lack of stores to sell out of, but also the propensity for many consumers to go to the black market for their cannabis needs.Although there are those that have suggested supply is the culprit because it's oupacing demand, that isn't an accurate assessment of the situation. There is plenty of pent-up demand in the Canadian cannabis market. Again, the issue is the lack of physical stores to sell products in.From the point of view of supply temporarily exceeding demand because of few places to sell from, that would be true. But for the overall market, there is still plenty of demand that current supply could meet if there was a place to sell it out of.Eventually supply will exceed demand, but that time hasn't arrived yet. For now, investors need to discount revenue until confirmation that many more physical stores have opened in Canada. This is especially true for Quebec and Ontario.Changed outlookThe company guided for revenue in the quarter ended July 31 to be in a range of C$14.5 million to C$16.5 million. That is about a third less than the C$24.8 million consensus from FactSet.In the short term the reason given for a decline in expected revenue was “lower than expected product sell through.” Other companies have pointed to similar reasoning, but it puzzles me because it has been clear for some time that Health Canada was far behind in the approval process for licensing of physical stores. Why this wasn't pointed out much earlier doesn't make a lot of sense to me.What is surprising the market, in my opinion, is the fact the companies continued to operate under assumptions made early in 2019, where expectations were there would be a lot more retail stores to sell out of. But it has been apparent that wasn't going to happen in the near future.That means either Hexo believed it was going to be able to generate higher sales with or without the increase in outlets, or it failed to adjust its numbers to align with the market realities. The cost for that failure is the share price of the company getting hammered.If that's not bad enough, the company also downwardly revised it financial outlook for fiscal 2020, citing “regulatory uncertainty” concerning derivative products that are to be approved to be sold in Canada as of October, and to start to be sold in the latter part of December 2019.Hexo management said the result is an “increased level of unpredictability.”Consensus VerdictMost of Wall Street is surveying the troubled cannabis player from the sidelines, with TipRanks analytics demonstrating HEXO as a Hold. Based on 5 analysts polled in the past week, three rate a "hold" on HEXO stock, one says "buy", and one recommends "sell." (See HEXO stock analysis on TipRanks)Unsurprisingly, investor sentiment is very negative, with individual portfolios in the TipRanks database showing a net pullback from HEXO.ConclusionFor any of the Canadian companies, there was never going to be any meaningful impact on the top and bottom lines concerning derivatives until the first calendar quarter of 2020 because it will be the first full quarter of sales.Even there investors probably need to lower expectations until there is further clarity on how derivatives will be handled in light of the health concerns associated with vaping.Hexo had been getting a lot of positive momentum in the past from the company’s partnership with brewer Molson Coors, but as seen from Canopy Growth with Constellation Brands, and Cronos with Altria, having a big partner or deal in place doesn't mean it's going to result in improved performance.The most important thing Hexo needs is for there to be a lot more physical cannabis stores in operation. While it's not certain at this time it's the only reason for the decline in sales, there is no doubt it's the largest factor, as evidenced by peers like Canopy Growth and Aurora Cannabis, which also had a drop in expected sales.Presumably this is only a delay factor for Hexo, and the company will return to an improved pace of revenue growth as more stores are opened across Canada. For now, it's probably going to take two to three quarters before it reverses direction.If you believe in the long-term growth narrative for Hexo, this would be a buying opportunity at the current share price.Visit TipRanks’ Trending Stocks page, and find out what companies Wall Street’s top analysts are looking at now.
Shareholders of Aurora Cannabis (NYSE:ACB) have been very disappointed and this is not surprising. ACB stock once seemed to have a tremendous amount of potential, but things have not worked out very well and it has been losing a significant amount of money.Source: ElRoi / Shutterstock.com For fiscal 2019, which ended in June, Aurora reported a loss of $290 million. This worked out to be a loss of 29 cents a share.Because of these losses, it is not surprising that ACB stock has seen a significant decline. At this time last year, shares were trading at close to $12. Since then the price has dropped by about 60% to current levels around $4.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat was before yesterday's bleak outlook from Hexo (NYSE:HEXO), which sent the entire pot stock sector lower, including Aurora Cannabis stock which lost 9.5%. Aurora's Global Growth StrategyOne of the ways that the company believes can help it to turn things around is to have an extensive focus on expanding its global operations. Last year it expanded its sales and operations to more than 20 countries. It is trying to increase its distribution channels and to develop one of the largest distribution networks in the cannabis industry. * 10 Best Cloud Growth Stocks Right Now By securing various supply agreements and partnerships in strategic locations throughout the world, the company believes that it will be well positioned to access new markets as they emerge and grow. In Aurora's most recent report, the management discussed what it believes are important developments with regards to this global growth strategy.The Italian government picked Aurora to be the sole provider of medical cannabis. The Federal Institute for Drugs and Medical Devices in Germany selected it to be one of only three companies to grow cannabis in the country.Aurora was also given approval to ship medical cannabis to a pain treatment center in Poland and in Malta the authorities approved its application to establish a cannabis operation.In addition to these developments, Aurora also secured a supply agreement with a wholesaler in the Czech Republic. It was also picked by Luxembourg's Health Ministry to supply medical cannabis. Aurora is clearly making global expansion a significant part of its strategy.Time will tell whether this strategy will be successful or not. However, some investors question whether the company has taken on more than it can effectively manage. * 10 Great Biotech Stocks to Buy in Q4 The large number of acquisitions that Aurora has recently made pursuing this strategy has given the company a very big helping of Goodwill and intangible assets in its valuation. They have probably contributed to the company's losses and to the decline in its stock price. A Look at ACB stockACB stock went into a freefall in mid-September after breaking support the $5.50 level. This level was support at the end of August. After dropping about 20% and becoming very oversold it found support around the $4 level and broke its recent downtrend. Since then it has been consolidating between support around $4 and resistance around $4.50.At the time of this writing, Mark Putrino did not have any positions in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post Is Aurora Cannabis' Growth Strategy Enough to Turn Around ACB Stock? appeared first on InvestorPlace.
Stocks started off the session with a bang, ripping higher on hopes of a partial trade deal with China. Cannabis stocks weren't among those rallying, though, as the industry was hammered on Thursday. Let's look at a few top stock trades. Top Stock Trades for Tomorrow No. 1: Freeport-McMoRan (FCX)Shares of Freeport-McMoRan (NYSE:FCX) caught a decent rebound Thursday as UBS analysts said the stock is oversold and slapped a buy rating on the name.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDespite the report, the charts do not look all that healthy for FCX. For starters, it made new 52-week lows on Wednesday. Second, it's below all of its major moving averages and retracement levels.Even on Thursday, the stock's rally is being cut down by the declining 20-day moving average. At this stage, FCX is the very definition of a "prove-it" stock. Let's see how it does with the 50-day moving average at $9.58 and the 78.6% retracement at $9.77. * 10 Super Boring Stocks to Buy With Super Safe Returns Assuming these levels reject FCX, bulls will want to see the stock put in a higher low, potentially signaling that shares have bottomed. Top Stock Trades for Tomorrow No. 2: Coupa Software (COUP)Coupa Software (NASDAQ:COUP) has been demonstrating some relative strength over the past few weeks. For that very reason, it was a red-to-green trade candidate for me on Thursday morning.We pulled the trigger -- tweeted here -- as the stock has now gone on to post strong gains on the day. It's over that troubling range resistance between $148 and $150, as bulls look to see if it's got enough juice in the tank to take out its highs at $156.16.Above that mark could fuel a further rally. On a pullback, let's see if $148 to $150 acts as support. Below it puts the 50-day moving average in play. Top Stock Trades for Tomorrow No. 3: Hexo (HEXO)There will be a lot of cannabis investors shaking their heads at Hexo (NASDAQ:HEXO) today.The company slashed its fourth-quarter revenue estimates and yanked its outlook for up to $400 million in full-year sales. It sparked a wave of selling throughout the industry, with many names down double-digit percentages and/or hitting new 52-week lows.Hexo stock is no exception, down 23% and hitting new lows as we speak. The announcement also comes about a week after the company's CFO resigned.This one is a no-touch from me, particularly below its December low of $3.02. Above that mark could spark a rebound back up to its prior channel (blue lines), but even then, prior channel support may very well act as resistance. Top Stock Trades for Tomorrow No. 4: Cronos Group (CRON)Down about 6.5%, Cronos Group (NASDAQ:CRON) is not getting hit as hard as many of its peers. The move in cannabis stocks comes just a day after we looked at Canopy Growth (NYSE:CGC), warning investors of the precarious setup.Like CGC, Cronos has been making a series of lower lows and lower highs, a bearish technical development. However, it still has a significant level of support at ~$7.50, as well as channel support near current prices.Below $7.50 and the October 2018 low of $6.50 is on the table. If support holds and shares bounce, look for a test of the 20-day moving average. Top Stock Trades for Tomorrow No. 5: Aphria (APHA)Aphria (NYSE:APHA) stock is down over 13% on the day, erasing all of its enormous post-earnings rally from August (and more).Below $5 should have bulls cautious and below $4.55 should have them worried. Below the latter and the December low of $3.75 is on the table. For it to look better on the long side, APHA needs to reclaim $5 and the 20-day moving average.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 * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post 5 Top Stock Trades for Friday: FCX, COUP, Cannabis appeared first on InvestorPlace.
Technical analysis has a bad reputation. This isn't surprising because most of the technical analysis of marijuana stocks that I see is not very good. Some is downright terrible.Even worse, some analysts are proponents of bizarre techniques like Gann Theory or Elliot Waves. These methods are like the Loch Ness Monster or UFOs. They may be fun to talk about, but they are not real.What is real is the fact that in financial markets, certain levels are more important than others. These levels have more supply and demand at them. In addition, in financial markets prices are always doing one of three things -- going up, going down or staying the same. When understood and applied correctly, technical analysis should help you identify these levels and trends. This can lead to low-risk trading ideas.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Super Boring Stocks to Buy With Super Safe Returns After becoming the most oversold that they have ever been two weeks ago, many of the larger cannabis stocks have broken their downtrends and have been consolidating or trading sideways. It is too soon to tell whether or not they will turn around, but we have not seen the capitulation volumes that come with significant bottoms. This means there is a chance that they could start to trend lower again. Marijuana Stocks With Big Technical Levels: Aphria (APHA)Aphria (NYSE:APHA) manufactures and sells medical cannabis in Canada and internationally. It currently has a market cap of about $1.3 billion.APHA stock went into a free-fall after it broke support around the $6 level. This level was the low in mid- and late August.After becoming oversold, it found some support around the $5 level. There is support at this level because it is where the low was in early August. It has now broken its downtrend and is consolidating above $5.The term oversold refers to momentum. Momentum is a measure of where the stock is now versus where it was X many days ago. If the average of this measurement gets to an extreme on the downside, it would be considered to be oversold.This action illustrates an important dynamic about markets. When they are oversold and get to important support, they tend to rebound. When they get to important support and are not oversold, they tend to break the level. Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB) is a Canadian-based company that grows and sells medical marijuana, indoor cultivation systems and hemp-related food products.ACB stock was in a freefall, but after becoming oversold it has broken its downtrend and is consolidating.It found support right at the $4 level. This illustrates how nice, round levels are important psychologically. There is really no logical reason for doing so, but investors like to place their buy and sell orders at numbers like $10 or $20.If ACB turns around and rallies, there is a good chance that it will hit resistance around the $5.50 level. This is because it was a support level in August in addition to being important psychologically. * 10 Best Cloud Growth Stocks Right Now Few investors think about this, but why would a level that was support become resistance? Consider the following. Those investors who bought the stock at the support level are losing money once it goes lower. They do not want to sell it for a loss, so they tell themselves that if it rallies back up to tbreakeven, they will sell it to get out at breakeven. The large amount of sell orders for supply of the stock at that level creates resistance. Canopy Growth Corp (CGC)Canopy Growth Corp (NYSE:CGC) produces, distributes and sells cannabis in Canada. It has a market cap of $7.9 billion.CGC stock has broken support around the $23 level. There was support at this level because it is where the recent lows were in late August and early September. It has now become a resistance level.This is an illustration of how levels that were support become resistance. Investors who bought it at the level are losing money when the support breaks and the stock goes lower. They don't want to take a loss and decide that if it rallies back to the level they will get out of it at breakeven.In addition to this, the short-sellers are making money when the stock goes lower. They believe they made the correct decision and tell themselves that if the stock rallies back, they will short more and add to their positions.Added to this are professional traders seeking to profit off of a clearly defined level, and you can see that there are three groups of investors who want to sell stock at the level. This supply of stock is what creates resistance. Cronos Group (CRON)Cronos Group (NASDAQ:CRON) produces and sells cannabis in Canada and Germany. Its current market cap is about $2.7 billion.CRON stock recently broke its downtrend line and has been consolidating. If you want to be successful, you need to understand the concept of trends.When markets are going higher, the forces of demand are in control of the market. When they are headed lower, the forces of supply are in control. When prices aren't moving or are trading sideways, the forces of supply and demand are roughly equal.The break of a trendline can illustrate that the leadership of the market is changing or at the very least equalizing. In the case here, the break of the blue downtrend line shows that the forces of demand have for the time being, become equal with the forces of supply. * 10 Great Biotech Stocks to Buy in Q4 Of course, drawing trendlines is an art and not a science. But with some practice and an understanding of just what it is that they are supposed to show, they can help you make investment decisions. Hexo (HEXO)Hexo (NYSE:HEXO) produces, markets and sells cannabis. The current market cap is about $945 million, according to Zacks.HEXO stock may be breaking support around the $3.90 level. This level was support at the end of July, the end of August, and then again over the past two weeks. It will probably become a resistance level if it breaks.This chart illustrates how market bottoms are typically more volatile than market tops. This is due to human emotions. Stocks are bought due to hope. Stocks are sold due to fear. Fear is a much more powerful emotion than hope.When markets are forming bottoms, like they did in July, August, and now, sellers are afraid that the stock will continue to drop. Because of this, they sell aggressively without caring too much about the price. This dynamic is what creates the volatility. Medicine Man Technologies (MDCL)Medicine Man Technologies (OTCMKTS:MDCL) provides cultivation consulting services to cannabis growers. The current market cap is about $130 million. MDCL failed at resistance after becoming overbought and is now trending lower.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.Overbought refers to the momentum of the stock. Momentum is where the price is today versus where it was X many days ago. When this number reaches an extreme to the upside, it is considered to be overbought.This is an important dynamic to understand about markets. When markets are overbought and get to important resistance, they tend to selloff, as is the case here. * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? When markets are not oversold or overbought and get to important support or resistance levels, they tend to consolidate before resuming the trend. Tilray (TLRY)Tilray (NASDAQ:TLRY) engages in the research, cultivation, processing and sale of cannabis. Its current market capitalization is $2.8 billion.TLRY stock broke support around the $25 level. There was support at this level because it is where the recent low was in early September. It has become a resistance level. The recent downtrend has been broken and the stock is trading sideways.Longer-term, if the TLRY continues to drop there will probably be some meaningful support around the $22 level. This is because this is where the stock hit the market last summer when it went public.This is because various stake holders, such as investment bankers who brought the company public, early investors, and the management do not want it to break that level. This may cause them to become buyers which would create support. Cannabis Sector Momentum Last week, cannabis stocks and other equities became the most oversold that they have ever been. This means that the stocks are trading at levels that are significantly below their recent averages. Typically, when stocks are this oversold they then to rally.However, there is an interesting dynamic occurring here. Usually when stocks or sectors are this oversold, they are capitulating.Capitulation mean that the sellers want to aggressively sell their stock. They do not care about the price. They just want to get out of the position because they are are tired of watching the price drop. These dynamics usually cause large amounts of volume to trade while the stock makes a large move lower. * Don't Give Up on These 4 Cannabis Stocks In the situation here, despite being historically oversold, there has not been a significant increase in the average trading volume. This could be an indication that the sector is not yet ready to turn around and it will continue to trend lower after the current consolidation that is occurring. CannTrust (CTST)If you follow cannabis stocks, you are probably familiar with the CannTrust (NYSE:CTST) story. If you aren't, you should be, because I think we will soon be hearing about similar situations at other cannabis companies.CannTrust once had a market cap of more than $1 billion and was considered an industry leader. Then it got caught growing cannabis in unlicensed grow rooms after a disgruntled ex-employee tipped of the authorities. And as is typically the case nowadays, the management of the company discussed their illegal activities in detailed emails that the have been seized.This led to the CEO being fired, the president resigning and the stock crashing.Now it turns out that CannTrust was also using illegal seeds to grow in legal grow rooms. This resulted in illegal cannabis being sold in the legal markets -- though a CannTrust spokesperson disputed the latter part.It should come as no surprise that Health Canada has suspended its license. The company will also have to buy back and probably destroy the cannabis that it has sold, among other steps. I am not so sure that CannTrust, now better known as "Can't Trust," will be around for much longer.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post 9 Critical Things to Watch in Marijuana Stocks appeared first on InvestorPlace.
Canadian marijuana stocks were getting slammed Thursday morning, few more so than Hexo Corp., which had lost nearly a quarter of its value by late afternoon.
HEXO Corp (TSX: HEXO) (NYSE: HEXO) posted its preliminary financial report for the fiscal fourth quarter ended July, sharing expected net revenue for the quarter to be around CA$14.5 million to CA$16.5 million. It has also withdrawn its financial outlook for fiscal 2020, projecting net revenue for the year to reach around CA$46.5 million to CA$48.5 million. “Fourth quarter revenue is below our expectation and guidance, primarily due to lower than expected product sell through,” said Sebastien St-Louis, CEO and co-founder of Hexo Corp. “Over the past quarter, we began re-configuring our operations to focus on high-selling strains and initiated a new sales strategy that we believe will meaningfully improve performance.
GATINEAU, Quebec, Oct. 10, 2019 -- HEXO Corp (“HEXO” or the “Company”) (TSX: HEXO; NYSE: HEXO) is providing preliminary revenue for its fiscal fourth quarter and year ended.
As if there weren't already enough challenges negative catalysts for HEXO (HEXO) to overcome, the recent resignation of its new CFO has generated questions on the health of its financial division.According to former CFO Mike Monahan, the reason for leaving the company was in order to spend more time with his family. Yet, having been at the company for only about four months, it appears there was likely more to the issue because Monahan wouldn't have taken the job in the first place if family time was a top priority.That suggests something lacking in the company required more of his time than he thought when he made the decision to take the job. If so, it points to more problems ahead for HEXO, beyond the headwinds it already faced.Major ConcernAs some of my colleagues have pointed out, and I agree with them, it appears the reason for Monahan's departure was related to his job requiring much more of his focus and time than he originally thought. It also means the financial division of the company has far more work to get it up to speed than the market generally is aware of.What this has done is generated fears on what it is that really drove Monahan to leave so abruptly. There is no way the idea can be kept from the market concerning what is it within the company that isn't known at this time.Any time there is a perceived secret hidden underneath the hood of a company, it will cause investors to hold off until there is more visibility concerning the issue.If Monahan had been a relative CFO newcomer to a public company, a potential lack of experience or lack of ability to move the company financial unit forward could be an explanation. But since Monahan is an experienced CFO that last worked at Nutrisystem, it does appear there is more to the story than lack of family time.It also could be argued that there was miscommunication between HEXO and Monahan concerning time expectations and commitment, yet with his experience and the need for management continuity at HEXO, it's hard to believe all those things weren't openly dealt with. The idea time expectations weren't on the table from the beginning is difficult to believe.Bank of America's Bullish Stance on HEXO Comes to an EndThe stock market’s dim view of HEXO has gotten even dimmer.After hearing about Monahan's departure, Bank of America analyst Christopher Carey wasted no time giving up his "buy" rating on HEXO. The analyst downgraded the stock to Sell, while slashing his price target to $3.00 (from $7.00), which implies about 20% downside from current levels. (To watch Carey's track record, click here)Carey commented, "While there were already risks for Hexo, we felt they were balanced by a sound core operation and a new CFO who had a chance to regain Street credibility on forecasts/guidance by resetting the bar, with the potential that momentum regained in CQ120 with the launch of value-add formats. Following [the departure] announcement, this broader thesis is simply untenable."Overall, this troubled cannabis player certainly has the Street divided, as TipRanks analytics indicate HEXO as a Hold. Based on 3 analysts polled in the last 3 months, one says "buy," one suggests "hold," while the third one recommends "sell" (you can guess who). The 12-month average price target stands at $4.82, marking a nearly about 30% upside from where the stock is currently trading. (See HEXO stock analysis on TipRanks)ConclusionWith investors now scared off some by this latest event, it means the company may have to dig out of a bigger hole than it has been in from negative sentiment at the macro level of the cannabis sector, and from performance concerns in general. My view is the cannabis market won't turn sustainably around until at least the end of the first calendar quarter of 2020.There had been hope that Monahan, with HEXO's margin strength, would be able to strengthen the balance sheet of the company and help stem some of its cash burn, which was at C$43 million last quarter, with a cash balance of C173 million.As it stands now, HEXO has the additional headwind of investor suspicion on the condition of its financial department, and the probability it may need a lot more work on it before it reaches a more mature operational level.Until the market knows, one way or the other, what is happening in HEXO's financial division, I think it's shares are going to remain under pressure. It can’t be done from the company making statements, restoring investor confidence will have to come from the next couple of earnings reports.
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
HEXO Corp. (TSX: HEXO) (NYSE: HEXO ) announced Friday that Chief Financial Officer Michael Monahan is resigning due to family reasons. "Since joining HEXO Corp, it has become apparent that this ...
“Since joining HEXO Corp, it has become apparent that this job requires me to spend the majority of my time in Gatineau and in Ottawa. HEXO Corp’s CEO has also announced that Stephen Burwash, who is currently Vice-President of Strategic Finance for the Company, has accepted the role of Chief Financial Officer.
[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.]Technical analysis has a bad reputation. This is unfortunate, but probably well deserved. Most of the research that I see, especially technical analysis of marijuana stocks, isn't very good. Much of it is downright terrible. And even after extensive research, the academic community still doesn't seem to have a definitive take on the practice.Most analysts look at charts and mindlessly try to identify patterns without actually understanding what they are supposed to mean. Even worse, some analysts are proponents of bizarre techniques like Elliot Waves or Gann Theory. In my opinion, these methods are like UFOs and Bigfoot. Sure…they may be fun to talk about but they are not real. Professional institutional traders do not use them.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat is real is the fact that in financial markets there are certain levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, in financial markets prices are always doing one of three things. They are either going up, going down, or staying the same. If understood and applied correctly technical analysis should allow you to identify these important levels and trends. This knowledge will benefit your investment style, regardless of what it is. * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains The action in many of the cannabis equities has been very weak. Many of the stocks in this sector are testing or have broken important support levels. Aphria Inc (APHA)Aphria Inc (NYSE:APHA) produces and sells medical cannabis in Canada and international markets.APHA stock broke support around the $6 level. This level was also support during the middle and then again at the end of August. If it continues to head lower there may be some support around the $5.20 level because it was where the low was in early August.The $6 level will probably now become a resistance level. This is because the investors who bought it when it was a support level are looking at losses now that the stock is lower. They tell themselves that if it rallies back to the level, they will sell their stock so that they can get out at breakeven.Those who sold it short at the support level are making money now that it is lower. They tell themselves that if it rallies back, they will short more and add to their positions. Both of these groups of investors will place their sell orders at the $6 level and this supply of stock creates resistance. Canopy Growth (CGC)Canopy Growth (NYSE:CGC) produces, distributes, and sells cannabis in Canada. It has a market cap of $8.7 billion.CGC stock has broken the $26.60 level which was the lower side of its recent range. It will probably become a short-term resistance level.If the stock continues to head lower there is a good chance that it will find support around the $23 level. This is because it is where the recent lows were in late August and early September.Levels that were support in the past tend to become support again because those who wanted to buy the stock at the level and didn't vow to themselves that if it drops back to the level, they won't miss it. This time they will buy it. * 7 High-Yield Dividend Stocks Set for Growth Those who shorted it at the level are looking at a loss when it rallies and goes higher. They tell themselves that if it comes back to the level then they will cover and close out the position at breakeven. This demand for the stock is what creates support at the level. Cronos Group Inc (CRON)Cronos Group Inc (NASDAQ:CRON) produces and sells cannabis in Canada and Germany. Its current market cap is about $3.5 billion.CRON stock just broke support around the $10.75 level and has dropped by over 10%. The $10.75 level was the bottom of the range over the past month, and it will probably become a resistance level. This move puts CRON back into a continuation of a longer-term downtrend that began in late March when it was trading around $24 a share. Since then the price has dropped by over 50%.This stock may drop much further. I don't see any clear support levels anywhere near current levels.Cronos continues to be hurt by its lack of leadership. The current CEO is only temporary and the Board of Directors has not yet selected a new person to run the company. KushCo Holdings, Inc (KSHB)KushCo Holdings, Inc (OTCMKTS:KSHB) produces and distributes packaging supplies. After the recent decline of the stock its market cap is $205 million.KSHB stock continues its freefall. It could be getting close to a capitulation which may mean that it could have a reversal and rally. Capitulation means that the sellers do not care about the price that they will receive for their shares. They just want their brokers to sell them. They want out at all costs so they can end the misery of watching the stock go lower everyday. * 7 Worst Stocks in the S&P 500 in 2019 This type of selling typically leads to large volatility and a large amount of volume trading. That is starting to happen here. The volume over the past few days has been very large and the stock is gapping down. Aurora Cannabis Inc (ACB)Aurora Cannabis Inc (NYSE:ACB) is a Canadian based company that grows are sells medical marijuana, indoor cultivation systems, and hemp related food products.After a weak earnings report and some analyst downgrades ACB stock has been in a freefall over the past three weeks. On the day of its biggest drop, it found support around the $5.50 level. There was support there because it is where the low was in early September. Now the stock has broken support around the $5 level. There was support at this level because it is where the lows were at the end of last year. It is also an important level psychologically. People like to buy stocks at nice round levels. It will now probably become a resistance level. * 5 Stocks to Buy That Could Double in 2020 ACB is oversold so there is a good chance that it has a relief rally soon. The last three times that it was this oversold a rally followed. The term oversold refers to momentum. Momentum is a measure of where the stock is today verses where it was X may days ago. When this number becomes an extreme difference from the mean to the downside it is considered oversold. Tilray, Inc (TLRY)Tilray, Inc (NASDAQ:TLRY) engages in the research, cultivation, processing and sale of cannabis. Its current market capitalization is $2.6 billion.TLRY stock has broken the bottom of its recent range and has been heading lower. Short-term, there may be some support around the $25.20 level because this is where the recent low was in early September. Longer-term, if the stock continues to drop there will probably be some meaningful support around the $22 level. This is because this is where the stock hit the market last summer when it wen public.The cannabis industry is entering a consolidation period where I believe we will see a large amount bankruptcies, mergers and acquisitions. This company may be a takeover target because it recently acquired a huge block of shares that it will try to sell over the next two years. A strategic partnership is probably the most realistic way of doing this. CannTrust Holdings, Inc (CTST)CannTrust Holdings, Inc (NASDAQ:CTST) produces and distributes medical and recreational cannabis in Canada. At least it used to. The survival of this company is doubtful. If you follow the cannabis industry, you are probably familiar with the CannTrust story. CannTrust, now better know as Can't Trust, got caught growing cannabis in unlicensed grow rooms after a disgruntled employee tipped of the authorities.As is typically the case nowadays the management of the company discussed their illicit activities and detailed emails that the have been seized.Then it turned out that CannTrust was using illegal seeds to grow in legal grow rooms which resulted in illegal cannabis being sold in the legal markets. * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains It should come as no surprise that this week Health Canada has suspended in license. Now the company will have to bear the costs of acquiring and probably ultimately having to destroy the cannabis that it has sold. I am not so sure that this company will be around for much longer.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 * 10 Cloud Stocks to Invest in the Future * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains * 7 Cheap Stocks That Ought to Consider a Sale The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
As the stock market continues to beat down the Canadian cannabis stocks, investors need to find companies poised to benefit from Cannabis 2.0 with attractive stock valuations and valuable partnerships. HEXO (HEXO) fits the bill with their “Powered By HEXO” branding and big partnership with Molson Coors (TAP). The stock value just happens to be attractively priced.Powered By HEXOThe initial wave of cannabis companies was focused near solely on total production capacity and medical cannabis. As recreational cannabis legalized and shifted consumption away from medical, the dried cannabis pricing has turned downward as consumers aren’t willing to pay the premium prices assigned to medical cannabis.HEXO is focused on creating a brand for their products versus a focus on pure capacity growth. The company has capacity to produce 150,000 kg which is a substantial amount, but the leading Canadian players will quadruple those production levels.In fact, MKM analyst Bill Kirk sees the brand building over pure capacity growth makes the stock worth C$12.00. HEXO jumped nearly 11% on the news, but the stock still trades at only $4.15 on the NYSE. Kirk's target is equivalent to a $9.00 target price for incredible upside of far over 100%.The Cannabis 2.0 products open up mid-December. HEXO is one of the best positioned companies for this market opening up in Canada due to the beverages partnership with Molson Coors.The other companies with big partnerships have market valuations in the multi-billion range showing the bargain that exists in this stock trading for a valuation of only $1.1 billion. The whole benefit of working with Molson Coors is the access to the distribution network in the U.S. HEXO has 30 chemist and PhDs working on research surrounding making cannabis beverages and other edibles with faster onset while removing the taste and odor of cannabis products.Big PlansCEO St. Louis recently completed an interview where he has plans for the company becoming a top 3 global brand with at least 10% market share. Some might question whether the company is even a top 3 player in Canada.In order to reach this goal, HEXO has plans to spend up to $6 billion over the next decade on investing in cannabis products in Europe and the U.S. while having only spent about $500 million to date. In essence, the CEO is correctly planning to spend when the market develops in other parts of the world and will likely utilize the Canadian operations to fund a large part of that expansion.The company has a long way to go with forecasts for FY20 revenues starting this month only reaching $300 million. The good news is that investors aren’t paying up for hefty expectations before the market really opens up with Canada still battling black market cannabis and edibles not legalized until mid-December.TakeawayThe key investor takeaway is that HEXO is of the few cannabis companies that have steered away from growing farming operations in order to focus on the brand and partnerships that will fuel long-term growth. Both MKM Partners and the CEO see the company worth a lot more as the business model plays out over the next year due to the focus on beverages.TipRanks’ data shows an overwhelmingly bullish camp backing this cannabis stock. Out of the 15 analysts polled in the past 12 months, 11 rate Hexo stock a Buy, 3 rate the stock a Hold, while only one recommends Sell. With a return potential of nearly 150%, the stock's consensus target price stands at $10.33.Disclosure: No position.
If there's a theme surrounding marijuana analyst coverage of Aurora Cannabis (ACB) these days, it would be this:Yes, Aurora is a great Canadian cannabis company. You don't get to nearly $5 billion in market capitalization on a whim. Yes, it's a leader, and yes, it might very well turn out to be one of the big survivors in the cannabis industry.But man, oh, man! Would you look at that debt load?In contrast to larger cannabis concern Canopy Growth (CGC), which has nearly $740 million in net cash on its balance sheet, or smaller HEXO (HEXO) -- $105 million in net cash on a very small debt load, Aurora occupies the unenviable position of being a company with nearly $250 million in net debt -- and its debt is growing by the day.Make no mistake: There aren't a whole lot of marijuana companies that you could call "healthy" today. Most are burning cash like it's going out of style (the aforementioned Canopy and HEXO included). But the thing is, with cash in the bank, these companies can sort of afford to keep spending on growth (for a while at least). Aurora, a quarter-billion in the hole already, and burning through cash at the rate of more than $460 million a year at last report, maybe cannot.This is the crux of the reason why earlier this week, CIBC analyst John Zamparo announced he is initiating coverage of Aurora stock with only a "neutral" rating and a C$7 price target. (To watch Zamparo's track record, click here)"Aurora has demonstrated a clear presence as a leading Canadian producer," concedes Zamparo, noting that the nearly C$100 million in cannabis that Aurora moved in Q2 was about 40% better than its nearest competitor could manage. The company is capturing market share in Canada, and even "beyond Canada's borders."In Europe, for example, its "international revenues should continue to grow" as it competes in an industry suffering from a shortage of EU Good Manufacturing Process-certified (EU-GMP) facilities. Already, Aurora is selling about 12,000 kilograms per year of product, and on track to double its revenues to C$28 million in fiscal 2020, then nearly double again to C$50 million in fiscal 2021.And yet, it's this very production capacity that Aurora boasts of that's contributing to analyst worries about the stock. "The company's ongoing investments in non-GMP cultivation capacity," warns Zamparo, could "generate limited returns." From a condition characterized by product shortages earlier this year, by 2020, he predicts that domestic cannabis supply will "reach 3x that of demand" -- probably causing prices to plummet.Worse, 2020 is the very year in which Aurora will be called upon to repay its "$230 million convertible debenture" (in March). Unless Aurora can find some way to finally start generating cash in an environment of rapidly falling marijuana prices (most analysts don't expect the company to turn free cash flow positive before 2022 by the way), Aurora may be forced to take on new debt to pay off its old debt -- or more likely, dilute its shareholders with yet another equity issuance to raise the cash it needs.In that regard, it's worth pointing out: From June 2017 to June 2019, Aurora has already roughly tripled its share count as it sold shares to raise cash. Sadly for the stock's early investors, who have seen their ownership stakes severely diluted, it seems Aurora is every bit as good at selling shares, as it is at selling marijuana.Wall Street believes Zamparo is smart to play it safe when it comes to Aurora's prospects ahead, as TipRanks analytics reveal ACB as a Hold. Out of 11 analysts polled in the last 3 months, 3 are bullish on Aurora stock, 6 remain sidelined, and 2 are bearish on the stock. That said, the consensus average price target points to $7.04, or nearly 50% upside potential for the stock. This suggests that by consensus expectations, for now, the bulls win on Aurora. (See ACB's price targets and analyst ratings on TipRanks)
Cannabis Countdown: Top 10 Marijuana Industry News Stories of the Week Welcome to the Cannabis Countdown . In this week’s rendition, we’ll recap and countdown the top 10 marijuana industry news stories ...
When MKM analyst Bill Kirk initiated coverage of Aurora Cannabis (ACB) with a "sell" rating yesterday, the company's low cash reserves ($238 million) relative to debt levels ($486 million) were high on the analyst's list of concerns.Fortunately, this is not a problem that HEXO Corp (HEXO) has. Blessed with a balance sheet replete with cash ($129 million) and little debt ($23 million) to offset it, HEXO is one Canadian cannabis company where a lack of cash is not an immediate concern. Perhaps even more importantly, though, Kirk likes HEXO's business model and the prospect for the company to quickly make the tradition to a sustainable business of providing cannabis for the THC edibles market.As a result, Kirk initiates coverage on HEXO with a "buy" rating and C$12.00 price target, predicting about 130% gain for the Canadian marijuana stock in the next 12 months.HEXO, as Kirk explains, "has the best chance of creating a defensible brand" of marijuana ingredients that its consumer products partners such as Molson Coors (with which HEXO operates a joint venture) can incorporate into their products. In addition to just beer, Kirk sees HEXO providing a key ingredient in other beverages, cosmetics, and food. In furtherance of this strategy, HEXO has trademarked the phrase "Powered by HEXO" to advertise its importance in its partners' products.By making its cooperation in the creation of a product both clear and desirable to consumers (think how important seeing "Intel Inside" used to be to your choice of buying a laptop), Kirk argues that HEXO will avoid becoming just another "commoditized" marijuana producer. It could even be invited by future partners to team up, and thereby gain "early access to some exciting [marijuana product] categories."This could soon become important if, as expected, Canada legalizes the sale of "cannabis edibles" in December -- an event that Kirk describes as "Day One" of a new era for the marijuana industry. As he explains, HEXO is one half of a "two-horse field" angling to dominate the market for marijuana edibles. Giant Canopy Growth, partnered with Constellation Brands, is obviously the "horse" getting most of the attention today. But HEXO, partnered with Molson Coors, is the other half of the equation. The first company to get to market once edibles are permissible in Canada, argues Kirk, will have the best chance of building a "defensible moat" in the business.This will become even more important as marijuana production capacity ramps up over time. "Compared to Canopy, Aurora, and Tilray," you see, "HEXO has less growing" capacity -- but that's okay because simply cranking out "grams for the sake of grams" will become a losing proposition as supplies surge and marijuana prices fall. What's most important is figuring out a way to get the most money out of the marijuana you sell -- and in Kirk's estimation, HEXO's emphasis on building a brand, and making its product attractive to consumer goods partners, is the best way to do that.Visit TipRanks’ Trending Stocks page, and find out what companies Wall Street’s top analysts are looking at now.
CEO Interviews with: HEXO, HOTH, MDCL, NEXCFNews & VIDEO from Investor Conferences: NEXCF, MDCL NEW YORK, Sept. 18, 2019 -- Wall Street Reporter, the trusted name in.
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 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.
Since hitting a 52-week high of $8.40 in April, Hexo (NYSE:HEXO) slid down for the last several months and has since been trading sideways within the $4-$4.50 range. In fact, HEXO stock, now in negative territory for 2019, has lagged other pot stocks generally as compared to the Alternative Harvest ETF (NYSE: MJ).Source: Shutterstock That MJ exchange-traded fund is up slightly by 1.4% for the year. HEXO stock is the seventh-largest holding in the fund's 37-pot stocks portfolio. Now with the fall investor season in full swing, Hexo may be finally ready to break out of the trading band after their next quarterly earnings call later today.The cannabis sector is well known for highly cyclical boom and bust trends. When trading finally moves from sideways to a bounce back, here are three key reasons why Hexo is a pot stock to watch. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Canada's Cannabis 2.0 Around the CornerHexo is one of the Big Five Canadian cannabis stocks. As such, Hexo stock will likely be a prime target of investor interest next month. As part of the ongoing process of national legalization of cannabis in Canada, Oct. 17 marks the date when it becomes legal to sell cannabis extracts. The first round of legalization in Canada began in 2018 but applied only to dried marijuana. The legislation scheduled to take effect next month will bring into the Canadian market a vast range of cannabis-infused edible products that will be far more appealing to a broader audience."The edibles market is estimated to be worth at least $1.6 billion a year in Canada, with cannabis-infused beverages adding a further $529 million," according to Jennifer Lee, Deloitte Canada's Cannabis national lead. "The introduction of cannabis-infused edibles will clearly threaten the alcohol industry as consumers are using the product for similar usage occasions," she wrote recently. * 7 Deeply Discounted Energy Stocks to Buy Hexo has been patiently waiting to pounce on the newly expanded market and has already developed cannabis-infused gummy candies, a premium vape line as well as several cannabis-infused beverages. Powered by Hexo: Innovation will Protect MarginsAs the global cannabis market expands, commodification is inevitable. That is, a bulk of consumers may simply seek their best bang for the buck.Generic cannabis producers focusing purely on high output and low price could get caught in a price squeeze. Seeing the long-term direction of the market, Hexo has invested heavily in R&D and product innovation to enhance the brand value of a "Powered by Hexo" product line. "Building our innovative technology is critical in building a brand. We believe that brand will be the final moat by which CPG cannabis companies are differentiated," explained Sebastien St-Louis, Hexo co-founder and CEO, on a recent earnings call."We're continuing to expand our R&D and innovation team with top scientists, chemists who have extensive experience in CPG companies. We now have 25 PhDs on staff. They're focused on developing new and innovative products for the market and best-in-class technology for our Powered by HEXO experiences," he said Strong Top Line RevenuesThe global cannabis market is still in the very early stages where firms are focusing primarily on building infrastructure, expanding distribution channels, and creating a market presence among new consumers.While Hexo is certainly building production capacity and distribution as well as creating a valuable brand identity, it is undoubtedly furiously growing top-line revenue. Hexo's total gross revenue was CAD 15.9 million ($12.05 million) for Q3 2019, 11.8x over the same quarter in 2018. Hexo expects revenue to double in Q4 2019, particularly as it starts to expand aggressively beyond Quebec. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off Undoubtedly, there is much risk inherent in Hexo's financials, as well as the entire pot stock sector. Hexo operating cash flow is negative, and operating losses continue to mount. Further, many investors are becoming wary of the ebbs and flows of political sentiment about new cannabis laws in the US, where the Republican-controlled Senate has so far expressed near-zero support for legalization.However, all these risks are already well and truly baked into the Hexo stock price. A favorable earnings call this month may be all it takes to see Hexo stock rebound for its current sideways trading pattern. Given the intraday volatility, Hexo may be a good buy on any market dip.As of this writing, Theodore Kim has no positions 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 As Canadians Get Ready for Edibles, is Hexo Stock Ready to Bounce? appeared first on InvestorPlace.