Quebec’s largest cannabis stock . . .
Just announced a huge $263 million acquisition. It’s the latest deal in the marijuana buyout boom.
My top three trades for 2019 could be even bigger than “pot stocks.”
Frankly, I’m expecting some massive profits within two years, including:
HEXO (NYSE: HEXO) will pay one-quarter of a billion dollars . . .
To acquire Newstrike Brands (TSE: HIP).
The HEXO deal expands its operations with 470,000 square feet of cannabis production space.
HEXO is the largest cannabis producer in Quebec. And it clearly wants to expand its footprint and growing capacity.
But management may be even more excited to access to a branding partnership with the band Tragically Hip.
Newstrike shares rose 11% on the news of the HEXO deal. And Newstrike shareholders will receive stock in HEXO in the transaction.
Meanwhile, HEXO shares jumped 6% on the announcement.
And shares are up 83% since the late December lows.
Shares were “up-listed” on the New York Stock Exchange in mid-January.
HEXO currently has a $1.2 billion market cap. And once the HEXO deal closes, the company’s valuation will be around $1.5 billion.
The company just issued impressive financial guidance.
For the year 2020, HEXO expects revenues of $479 million.
That means the company trades for a reasonable multiple of just three times sales.
That compares quite favorably with the major Canadian cannabis stocks like Canopy Growth. For example, Canopy currently trades at 20-times sales estimates for 2020.
In comparison, HEXO shares are a downright bargain.
How would you like to make 1,053% . . . 2,977% and even 4,235% profits?
Yours in Profits,
Full Disclosure: Ian Wyatt owns shares of HEXO and Canopy Growth.