HEXO Corp (NYSE:HEXO)(TSX:HEXO) is gaining more attention from investors as the company’s position in Canada and the agreement with a major beverage company continues to strengthen HEXO stock.
HEXO’s Stock One OF the Most Exciting In Canada
HEXO stock is attractive because of its low valuation relative to that of peers. Although the company is comparatively small it nonetheless has the attributes that can add the needed stockholder value. Currently, HEXO is among the most promising marijuana equities in Canada.
Among the things making HEXO hot is their preferred supplier status in Quebec province in Canada which means they control approximately 50% of the recreational use of marijuana in the region. The province of Quebec has a population of around 8.4 million which is almost 25% of the adult population in Canada.
The company has announced the buyout of Newstrike Brands for $263 million in an all-stock deal. The addition will increase the company’s cultivation space by 1.8 million square feet adding to the current 579, 000 square feet.
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Hexotoe-to-toe with industry leader
Hexo’s current market cap of $1.6 billion does not place the company at par with market leaders Aurora cannabis (NYSE: ACB) and Canopy Growth Corp (NYSE:CGC) but it still brings them closer to the industry leaders in terms of production.
As other companies like CannTrust Holdings Inc. (NYSE:CTST) take a beating in recent times, HEXO stock managed to avoid the downward trend after Bank of America analyst started covering HEXO putting a price target of $10 per share. HEXO is currently trading at $7.70 per share which looks like a bargain.
HEXO has attracted interested from Molson Coors Brewing (NYSE:MO) and according to InvestorPlace’s Josh Enomoto, it shows great potential. The deal has the potential of achieving high-level acceptance in CBD products thus having an edge where other players like Cronos Group (NASDAQ:CRON) will struggle.
Going forward HEXO is likely to be one of the leading cannabis companies in Canada. Equally, its relatively low PE ratio is among the attributes that make HEXO one of the most promising cannabis stocks currently. Sign-up for continuing coverage on shares of $HEXO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $HEXO, either long or short, and we have not been compensated for this article.