Why HEXO Stock Briefly Spiked Today

Lloyd Doyle
March 16, 2019

HEXO is one of very few pot firms that have struck coveted deals with alcohol, tobacco and pharmaceutical companies over the last six months - Cronos Group announced a $2.4 billion investment from tobacco giant Altria Group last December, while Tilray Inc. partnered up with Swiss drug giant Novartis AG around the same time to develop and distribute medical cannabis.

HEXO Corp will also acquire a substantial amount of cash. It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures.

The new deal will add "470,000-sq-ft in production space" to HEXO's already existing production capabilities, according to a press release.

Trading volume is an essential technical indicator a shareholder uses to confirm a trend or trend reversal. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. The co's performance for 6 months was isolated positively of 1.42%, 1-year performance stands at 95.73% and year to date showing increased performance of 73.47%.

Traders seeking a better understanding of the stock can look at the underlying technical data. Based on the value of Hexo shares at the close on Tuesday, the offer would be worth almost 47 cents per share.

Why is EPS essential to watch? To calculate EPS, you take the profits left over for shareholders and divide by the number of shares outstanding. Hundley forecasts that the company will post earnings per share of ($0.01) for the quarter. They issued a "buy" rating and a $12.00 price objective on the stock. Amid the previous 3-months, the stock performs 58.39 percent, conveying six-month performance to 1.42 percent. (TSXV:HIP) for ~$263M in shares, or a value of approximately $0.46/share. This based on a 1.0-5.0 numeric scale where Rating Scale: 1.00 Strong Buy, 2.00 Buy, 3.00 Hold, 4.00 Sell, 5.00 Strong Sell.

HEXO's stock price closed at $7.40 Tuesday evening, while Newstrike's hovered at the $0.45 mark.

A company that manages their assets well will have a high return, while if manages their assets poorly will have a low performance.

"Still, there is this general investor belief that it doesn't matter what happens because there is going to be all this consolidation in the industry and my penny stocks will get acquired so I'll be rescued with a huge premium", said Matt Shalhoub, managing director of cannabis-focused venture capital firm Green Acre Capital, which is not invested with either Newstrike or Hexo. In the meantime, the HEXO Corp.'s 14-day RSI was settled at 62.96. "Just gave it away, shareholders be damned!" All in all, the trends of the stock market were shifting slowly but surely.

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