While it is true that the entire marijuana sector has been beaten down over the course of the past few months, some underperforming stocks do stand out, and one of those is HEXO stock.
Earnings Put Pressure
Although some companies did manage to bounce back with impressive Q2 2019 results, HEXO Corp's (TSX:HEXO) (NYSE:HEXO) financial results proved to be a disappointment and the stock has continued to slide. HEXO stock eventually dropped to a 52-week low of $3.70 this morning, and the company is now trading below the psychologically important valuation of $1 billion USD. Hence, it is interesting to figure out if there are any redeeming features that might result in renewed interest from investors.
The company has also been through the departure of a key executive in the form of Adam Miron, who resigned from his position as Chief Brand Officer. It is being speculated that Miron resigned from his position because he believed that the Canadian regulator Health Canada was slowing down the growth of the company. Over the past three months, HEXO stock has shed as much as 40%, and it remains to be seen if the stock can bounce back in the coming months.
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Recently, the company appointed Donald Courtney as the Chief Operating Officer. He was previously an executive with Mars, Pepsi Bottling Group, and MedReleaf. He brings enormous experience to the company, and his primary job is believed to be focused on driving the company’s global expansion plans.
Considering the fact that many countries are now on the cusp of legalizing medical marijuana, a strategic global expansion will make the size of the addressable market far bigger. Some other executives have also been added, and they will oversee the work of 25 doctorates, who work for the company. If HEXO can come up with a range of new products just when the industry is one the verge of expanding, then it could prove to be a trigger for growth.
HEXO stock has slumped over 50% from late April's peak price.
Featured image: Canva
