HEXO stock is one of the biggest losers in the cannabis industry due to the broader weakness in the sector. Let's review the recent developments from HEXO Corp (TSX:HEXO) (NYSE:HEXO).
Broader Weakness
Cannabis stocks have been beaten down a bit over the past few months, and many stocks that scaled new highs earlier in 2019 have given up much of those gains. However, many investors who remain optimistic about the marijuana sector are currently looking for stock picks. In that context, it is interesting to have a closer look at HEXO Corp, which remains among the better-known cannabis companies in the industry.
One of the most important factors in favor of HEXO stock is that it is the most dominant cannabis supplier in the state of Quebec in Canada. Quebec remains one of the most important markets in Canada, and HEXO’s domination of the market is a huge plus. This could make it the subject of a takeover bid from one of the bigger marijuana companies.
HEXO stock is now down 2% at $5.80 CAD.
>> Aurora Stock Falls: Completes Acquisition of Hempco Food and Fiber
Expansion Holds Key
However, the company is also trying to expand its footprint substantially, and the $260 million acquisition of Newstrike Brands is to thank for it. Now, HEXO Corp will have a presence in as many as eight additional states. Moreover, HEXO is also in the process of building a large plant in Greece in order to take advantage of the growing cannabis industry in the region.
It has also partnered with brewers Molson Coors Canada (NYSE:TAP), which will allow the company to create non-alcoholic cannabis-laced beverages. Beverages could be the next big thing, and HEXO has struck an important partnership that could give it a big advantage over its peers.
All these factors seem to have made HEXO a far more attractive stock for those who seek value in the market. The stock recently hit $6.50 CAD, which reflects a rise of as much as 25% over the course of the last two weeks. However, it needs to be reiterated that back in April, HEXO stock was trading at $11.00 CAD. It is clear that there might be some volatility in the stock over the short term, but those who have a longer-term outlook could find value by investing in HEXO.
What do you think?
Featured image: Canva
