Pyxus International Inc (NYSE: PYX) is having a great start to the trading session this morning. However, if you’re looking for press releases or SEC filings, you’re out of luck. The company has released nothing!
Nonetheless, there is a catalyst to this run. Today, we’ll talk about:
- Why PYX is headed up;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why PYX Is Up
As mentioned above, Pyxus International is having a strong day in the market today, but has released no news. So, what’s the catalyst?
Well, the gains in the stock are likely a sympathy play as a result of strong revenue results that were released by Canopy Growth Corp earlier this morning.
In a press release, CGC said that it generated revenue of $83 million in the fiscal third quarter. Analyst only expected that the company would generate $61 million. So, what does this have to do with PYX?
The company is a long-term player in the tobacco space. However, as tobacco sales have started to decline, it has been looking for ways to capitalize on emerging markets. In fact, it has made two big moves to do so.
First and foremost, the company launched products in the tobacco vaping space, hoping to capture some of their lost audience. Moreover, upon changing its name to Pyxus International, it announced that it would be moving into the cannabis space as it saw promise in the Canadia market.
Today’s earnings report from CGC ultimately shows that PYX made a smart decision. With the revenue beating expectations by such a wide margin, investors are excited about the prospect of the cannabis space in Canada and the company’s involvement in the space.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that it’s important to follow news, not only on the asset that you’re interested in, but on correlated assets.
Today’s run in Pyxus is a good example of why it’s so important to do so. Sure, the company didn’t release any news, but the strong results from CGC are a point of validation for the company’s move into the cannabis space. This is what’s exciting investors.
As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:20), PYX is trading at $23.60 per share after a gain of $0.83 per share or 3.65% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PYX. In particular, we’re interested in following the story surrounding the company’s work to take advantage of the quickly emerging cannabis market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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