RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Hexo, Bombardier Among Issuers Dropped by S&P/TSX CompositeAppreciate the feedback Renaissance2019 as well as your insights on the INDEX.
GL with your investing.
Q
renaissance2019 wrote: Quinlash... just want to say thanks for all your informative posts, and happy to admit am one of your many followers. Because of recent unwarranted attacks, I am compelled to make my 1st and hopefully last post.
Quietinvestor is correct Fund Manager must sell Hexo shares in their Index Funds if/when Hexo is not part of the composite Indices. Quinlash is also correct, Fund Managers can still hold their Hexo shares as long as the shares are outside their Index Fund.
Now, the truth about HEXO being dropped from the S&P and TSX composite.and potential impact will depend on market direction. This applies only to Index Funds.
Being part of the S&P/ TSX Composite Indices can be good and bad.
The Good - on a "Bull Market" - Funds must add (buy) Hexo indpendent of HEXO news. Any bad news will be cushioned from buying per indices regulations.
The Bad - on a "Bear Market" - Funds must reduce (sell) Hexo again independent of HEXO news. Any positive news will be "dampen" from selling due to regulations.
How many Hexo shares the Fund Managers add or reduce will depend on the weighted averages of their respective holdings and the sector's (health care) proportion to the composite indices.
IMO, being in the S&P/ TSX composites have been a drag on Hexo. The recent sell-off (due to a 2nd wave covid-19 outbreak fears) reflected by the S&P/ TSX clamped Hexo from achieving higher sp's post Q3 results. Once out of the composites, Hexo will no longer be limited by the listing regulations and able to "free" trade to new heigts. Wtih all the cost cuts, right-sizing to markets, Belleville license approval, increase market share, new product launches , improve efficiencies, reduced operating costs, sell of Niagara facilities (close by end year for ~$11M), well funded for 2020, expect positive EBITA end 2020, TRUSS launches, etc, etc. does any one believe Hexo would be trading where it is if not for being in the S&P/ TSX composite?
Out of the S&P/ TSX, IMO, will be a HUGE benefit for HEXO.
glta