HEXO Corp. has taken cannabis out of the local farms and into research labs to give customers an exceptional product. With the legalization of marijuana in the U.S. and Canada, the cannabis industry is pegged to grow bigger and better in the coming days.
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How to Buy HEXO Stock
Are you looking to expose your portfolio to the cannabis industry? Here’s a guide to help you invest in HEXO stocks.
- Pick a brokerage.
Online brokers allow you to pick and trade stocks with ease. Many of these online brokers let you trade stocks at a $0 commission rate. Manage your portfolio and get the latest financial news on a single platform.
- Decide how many shares you want.
You can determine the number of shares you want to buy based on your financial needs. If you want to invest $1,000 in HEXO, you can divide your budget with the price of the stock. Let’s say HEXO is trading at $0.75 per share. In that case, you buy 1,333 shares of HEXO with a $1,000 investment.
- Choose your order type.
There are different order types you can choose to execute your trade.
Bid: The bid is the price at which you want to buy the shares. Let’s say the stock quote of HEXO is $0.75. If you place a bid for $0.70, the order will be executed only if the price of the stock drops to that value.
Ask: The ask is the price at which you want to sell your shares. If you place an ask order for $0.80, the order will be executed only if the price of the stock rises to that value.
Spread: The difference between the bid and the ask is called the spread. If the bid price of HEXO is $0.70 and the ask price is $0.80, then the spread is $0.10.
Limit Order: A limit order lets you set the price at which you want to sell or buy. This order type lets you trade shares at the price of your choice. However, if the price of the stock doesn’t match the price of your limit order, it will not go through.
Market Order: A market order lets you buy or sell shares at the stock quote. The stock quote depends on the market and not on any individual buyer or seller. It is the fastest way to execute the trade but you have no preference over the price.
Stop-Loss Order: A stop-loss order lets you limit your losses with a trade. You can assign a stop-loss value of $0.70 for HEXO and the moment the stock quote hits that value, it will turn into a sell market order.
Stop-Limit Order: A stop-limit order is the combination of a stop-loss and a limit order. You have to assign 2 values for this order. For instance, you can assign the stop-loss order for HEXO at $0.70 and a limit value of $0.65. This means the order will only go through if the price dips below $0.70 and places a limit at $0.65. If the stock quote dips below $0.65, the order will not take place, limiting your losses. - Execute your trade.
After you have decided on the number of shares to buy or sell, you can execute the order to complete the transaction.
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HEXO Stock History
Previously known as The Hydropothecary Corporation, HEXO was incorporated in 2013. It is one of the largest licensed cannabis companies in Canada and operates a 2 million square feet facility in Ontario and Quebec. It also has plans to start processing, producing and distributing facilities in Greece to tap into the European market.
HEXO has created many brands to cater to different audiences, making it one of the best stocks under $5 to invest in. These brands include the following:
HEXO: HEXO medical cannabis has earned a reputation for high-quality products and exceptional customer service. Its products include dried flowers, oils, vapes and decarbs. Some of its offerings include Atlantis, Sierra, Tsunami and Helios.
HEXO Plus: HEXO Plus offers cannabis with high levels of THC content and infused flavors that together create a rich sensorial experience. These cannabis strains include Horizon, Lagoon, Nebula and Pandora.
Original Stash: Grown in a controlled environment, Original Stash offers high-quality cannabis strains at low costs.
Up: Located in Brantford, Ontario, Up has a hydroponic indoor growing facility where the iconic Meridian sativa is cultivated. Its products include the Moon, 50Kush, Gems, Meridian, Eldo and Grace.
As advocates of safe smoking, HEXO believes in spreading information and cautionary messages to help its customers have a good time.
Pros to Buying HEXO Stock
Take a look at some of the advantages of investing in HEXO stocks.
1. HEXO is strengthening its balance sheets.
Cash is king and having a positive cash flow on the balance sheets can be very attractive to investors. Recently, HEXO sold its greenhouse in Niagara, Ontario, for CA $10.25 million. HEXO had acquired the greenhouse as part of the $193 million deal with Newstrike last year but it had stopped cultivation in the facility due to corporate downsizing.
The proceeds from the sale will be directed toward the expansion of its facility in Belleville, Ontario and other business initiatives.
2. HEXO is forging new strategic partnerships.
Following the legalization of cannabis for recreational use in Canada, it is all set to go full throttle in the upcoming launch of Cannabis 2.0. This new platform in Canada is gearing up for many cannabis companies to enter the edibles, topicals and concentrates market.
To top it off, HEXO has announced a joint venture with Molson Coors called Truss CBD USA. This new brand is working on non-alcoholic CBD-based beverages for the consumer market. With the help of Truss CBD USA, HEXO plans to find its footing in the U.S. as well. HEXO is also open to partnerships from other brands to churn out flavored CBD-derived consumables.
3. HEXO is adhering to medical packaging regulations.
The cannabis company has redesigned the packaging of its many products to comply with medical packaging regulations. Starting with its newly launched high-THC strain Tsunami, HEXO products are now available in resealable and child-lock enabled pouches. The renewed packaging helps keep the herbs fresh and dense with enhanced humidity control.
In June 2020, HEXO received a license amendment from Health Canada for its manufacturing unit in Belleville, Ontario. It is equipped with cutting edge cannabis technology and custom-built automation to streamline its processes. This facility is expected to lower expenses and increase margins.
4. HEXO is growing in revenue.
As per the financial report of Q2 2020, HEXO generated revenue of $22.48 million, beating the Zacks Consensus Estimate by 58.39%. It is significantly higher than the company’s reported revenue of $11.98 million for Q2 2019.
HEXO has topped consensus revenue estimates for 3 quarters in a row in the last fiscal year.
Cons to Buying HEXO Stock
Take a look at some of the disadvantages of investing in HEXO stocks.
1. HEXO stock quote is dangerously close to being delisted.
If an NYSE listed company’s stock price falls below $1 for 30 consecutive trading days, the stock exchange can delist the company.
As of late, HEXO stocks are trading below $1. If the stock quote of the cannabis company is unable to move past the $1 mark, it could be delisted from the stock exchange or be forced to do a reverse stock split to raise its stock price. Other Canadian cannabis companies such as Aphria (NASDAQ: APHA) are comparatively performing better in the market and are among the top stocks under $10 to invest in.
2. Cannabis companies are taking a hit.
This year has been particularly rough on the cannabis industry. Many cannabis companies are reporting a double-digit drop in the early months. HEXO stock took a huge plunge and dipped by 60%.
Hemp stocks under $20 such as the Canopy Growth (TSE: WEED) fell by 11%. Canopy Growth was the first cannabis company to be publicly listed in North America. Aurora Cannabis (NYSE: ACB) fell by 43%. It produces and distributes cannabis for medical and consumer brands. Aphria fell by 14%. Aphria is a Canadian company and specializes in medical cannabis products.
Make Your Investments Bloom
At less than $1 per share, HEXO stocks can be the most affordable investments in your portfolio. On the whole, the cannabis market isn’t at its peak. Making an investment in HEXO now can save you big bucks while you wait for the stock to recover.
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