Post by
Schaffhausen on Apr 08, 2020 11:25am
Got to Pick'em Right
A lot of excitement exists around the growth opportunity of the burgeoning cannabis sector, but fundamentally, you have to pick the winners. HEXO, regardless of its affiliation with MolsonCoors, is sinking with no real lifeline in sight. They had a big rally over the last couple of weeks, but they have no fundamentals that lead me to believe they are an investment grade business. No cash and no profits in sight inevitably mean increasing debt, dilution or insolvency...all these outcomes mean big investment losses. I see the mounting evidence that the many cannabis companies will be gone this year as many were built on the same premise as HEXO. VIVO on the other hand is a cannabis business with the fundamentals firmly in place. While others are diluting in a last ditch effort, VIVO is strengthening its balance sheet by buying out debentures!!! VIVO, with its cash on hand and verge of profitability will leapfrog the companies that built themselves up on the publicity of being the biggest producers that would be able to control the market. Truth is, in a cannabis world that outlaws outright advertising, and one which is oversupplied with dry flower, production capacity is an imaginary advantage and detrimental. Brand recognition is a slow and steady grass roots effort that Canna farms has pioneered and established and from which VIVO will grow. The base trading pattern of VIVO over the last weeks is culminating again into the deadlock seen in late December. The breakout is near. Cheers, Schaff
Comment by
knowbyheart22 on Apr 08, 2020 2:16pm
I agree with you. But why does the SP keep dropping?