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Should bargain hunters consider HEXO Corp in 2020?

Should bargain hunters consider HEXO Corp in 2020?The global cannabis market continues to see significant lows in 2020, and unfortunately, HEXO Corp (NYSE: HEXO) stock is no exception. However, this particular packaged goods cannabis company based in Quebec, Canada took an exceptionally awful hit last year with an 80% drop in share value lasting from June to December of 2019. This news was particularly devastating, primarily because of the high hopes the company and its shareholders had after acquiring Newstrike Brands, which led to a monumental increase in HEXO shares – although the increase was temporary.

Get your copy of our comprehensive Q1 2020 analysis of HEXO cannabis stock.

This colossal cannabis corporation may have had stumbled, but things may be looking up for you if you have HEXO shares, if you’re holding off from buying them or if you’re a bargain hunter.

Should bargain hunters consider HEXO Corp in 2020?

While HEXO Corp’s shares have been severely diluted the past year, there are reliable forecasts about the company’s growing momentum in the Canadian Cannabis Industry in the next few years, as long as it survives 2020’s highly volatile prices. According to Discounted Cash Flow (DCF) model calculations, it has been revealed that the stock is significantly underpriced as of May 2020. If the time horizon is set to 10 years, the equity value (sum of present and future value of the stock) is approximately is CA$368m (assuming that the value of the dollar today is more valuable that its value tomorrow). As a bargain hunter, this projected improvement means that by the current investment, you will be able to enjoy:

  • Engaging in trade at 32.4% below the fair value
  • Gain from revenue which is forecasted to increase 43.15% per year

But you might want to wait for HEXO stock prices to hit their lowest first!

A calculated investment may result in long-term stock gains. Given current market conditions, HEXO Corp stock price is expected to go down even further, before gaining momentum again. Fear not, as this works to investor’s benefit because then HEXO Corp is currently undervalued by 32%. If you already own HEXO Corp shares from last year, this can be somewhat hopeful news as it may encourage you to hold onto your shares a little longer before you count them as a loss.

Of course, this is just calculated speculation and analysis that largely depends on how HEXO Corp performs given Canada’s regulatorily-encumbered cannabis market when compared to the US cannabis market. The biggest concern for the company will be persuading investors to hold onto their shares so that it does not get de-listed from the NYSE this year.

Should bargain hunters consider HEXO Corp in 2020?

About Cannin: Your Marijuana Investment Experts

Should bargain hunters consider HEXO Corp in 2020?Cannin is your trusted resource for information about marijuana and hemp stock investment opportunities. Our global team of experts evaluates all emerging marijuana and hemp stock investing opportunities. We aggregate hundreds of hours of research and provide tips on the best marijuana and hemp stock investments for 2020. We provide the latest marijuana investment and hemp investment news and analysis. 

Use Cannin as your resource for breaking cannabis and hemp investing news, featured cannabis and hemp company analysis, comprehensive cannabis and hemp stock reports, or get your free trial now and use our Smart Stock Algorithm to take the guesswork out of profiting from the cannabis industry. Is it too late to invest in marijuana or hemp stocks like HEXO Corp? No! This is the perfect time to invest.

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