Hexo was a relatively unknown pot stock until recently. The Quebec-based company did not garner as much attention as some of its peers, and it still doesn’t. However, in a move that sent shockwaves throughout the marijuana sector, Hexo acquired Newstrike Brands, a Toronto-based grower and producer of cannabis products in an all-share transaction valued at about $263 million. Hexo’s share value increased by 5.56% the day this acquisition was announced.
Further, Hexo’s valuation metrics are far more attractive than those of most of its peers. With a price-to-sales ratio currently hovering at around five, the firm seems like a bargain by comparison to the industry’s standards. Thus, Hexo might just be one of the hottest pot stocks to grab in May.
Cronos was sometimes touted as the best-performing marijuana stock of all time. The company had been on fire since the beginning of the year, and that’s in comparison with equity markets that have recovered since last year’s slump. The company’s share value increased by about 100% between early January and early March. However, Cronos recently reported its much-anticipated Q4 financial results, and they were less than impressive.
Cronos showed an increase in revenues of 285% for the year. This growth was spurred by the sale of recreational marijuana products. But the company also reported significant losses of more than $19 million. In short, Cronos is lagging far behind competitors such as Aurora Cannabis, despite being the more expensive stock. To make matters worse, Cronos stock was downgraded three times within the last three months. This does not bode well for the Toronto-based cannabis seller.
Hexo has managed to become a better-known company with strong growth prospects. Cronos, however, recently lost its allure in the eyes of many investors and analysts. There is little doubt as to which of these stocks is currently the better option.
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