HEXO stock was on a solid run to the top in January, but that ended last week. Peaking at $7.79, shares have dipped since February 4th.
Is there a reason? Is insider selling of HEXO Corp (TSX:HEXO) (NYSE:HEXO) giving shareholders something to worry about?
HEXO Stock
Shares opened at $6.62 CAD on the TSX today, and are back in the green up 3% at the time of writing. The current price of $7.01 CAD still represents a significant drop from January's highs, though.
One concern that may be affecting share price is the amount of insider selling happening around this stock.
Insider Selling
Insider ownership of shares is, generally, a positive sign. When the team behind the company is buying a significant amount of shares, then shareholders can rest assured that the management team is doing all it can for the company's success. It's logical really, as they have as much to lose as investors do.
However, according to Simply Wall St., there has been substantially more insider selling than buying of HEXO stock in the last three months. Reported on February 6th, any savvy investors who are keeping an eye on this type of stock selling will no doubt question why this is.
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The numbers suggest a bearish sentiment. In total, insiders sold $616,000 CAD worth of shares. Director Vincent Chiara bought $198,000 CAD worth of shares in that period. The scales are not exactly balanced here, and while HEXO stock has been seeing highs in January, is that the only driver for selling?
Of course, this is the question outsider shareholders want to know.
Still a Play in 2019?
What draws investors to HEXO stock is that it is the undisputed leader in Quebec's recreational marijuana market. The company claims a massive 35% market share in the province and should be raking in a massive $1 billion CAD in the next five years thanks to this deal.
It also has its grip on Canada's other provinces, most excitedly Ontario—the mecca for recreational cannabis sales.
Would insider selling worry you? Or do you think it comes with the territory of investing?
Featured image: Canva
