Does The Scotts Miracle-Gro Company (SMG) offer a good opportunity for investors?

The Scotts Miracle-Gro Company (NYSE: SMG) stock fell -0.38% on Tuesday to $68.57 against a previous-day closing price of $68.83. With 0.55 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.71 million shares. During the session, the Agricultural Inputs company that operates in wider Basic Materials sector, reached to the highest price of $70.86 whereas the lowest price it dropped to was $68.30. The 52-week range on SMG shows that it touched its highest point at $102.25 and its lowest point at $39.06 during that stretch. It currently has a 1-year price target of $77.00. With its current market cap of 3.89 billion, SMG has annualized dividend of $2.64 while the current yield stands at 3.85%. Beta for the stock currently stands at 1.62.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SMG was up-trending over the past week, with a rise of 4.64%, but this was down by -4.86% over a month. Three-month performance dropped to -17.22% while six-month performance rose 21.26%. The stock lost -24.66% in the past year, while it has gained 41.12% so far this year. A look at the trailing 12-month EPS for SMG yields -11.23 with Next year EPS estimates of 4.15. For the next quarter, that number is 1.50. This implies an EPS growth rate of -187.30% for this year and 53.99% for next year. EPS is expected to grow by 11.10% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -34.50%.

Float and Shares Shorts:

At present, 56.00 million SMG shares are outstanding with a float of 40.18 million shares on hand for trading. On Apr 27, 2023, short shares totaled 2.82 million, which was 5.04% higher than short shares on Mar 30, 2023. In addition to Mr. James S. Hagedorn as the firm’s CEO & Chairman, Mr. Michael C. Lukemire serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 73.39% of SMG’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 43.19% of SMG, in contrast to 33.70% held by mutual funds. Shares owned by individuals account for 29.33%. As the largest shareholder in SMG with 8.50% of the stake, Kayne Anderson Rudnick Investment holds 4,757,169 shares worth 4,757,169. A second-largest stockholder of SMG, The Vanguard Group, Inc., holds 4,491,302 shares, controlling over 8.03% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in SMG, holding 3,477,933 shares or 6.22% stake. With a 2.70% stake in SMG, the T Rowe Price Mid Cap Value Fund is the largest stakeholder. A total of 1,508,394 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.31% of SMG stock, is the second-largest Mutual Fund holder. It holds 1,294,872 shares valued at 86.51 million. iShares Core S&P Mid Cap ETF holds 2.28% of the stake in SMG, owning 1,274,668 shares worth 85.16 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 31, 2023, SMG reported revenue of $1.19B and operating income of $95.90M. The EBITDA in the recently reported quarter was $112.70M and diluted EPS was -$8.01.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SMG since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With SMG analysts setting a high price target of $86.00 and a low target of $65.00, the average target price over the next 12 months is $77.38. Based on these targets, SMG could surge 25.42% to reach the target high and fall by -5.21% to reach the target low. Reaching the average price target will result in a growth of 12.85% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded SMG stock several times over the past three months with 24 Buys and 2 Sells. In these transactions, 11,457 shares were bought while 6,000 shares were sold. The number of buy transactions has increased to 101 while that of sell transactions has risen to 34 over the past year. The total number of shares bought during that period was 93,373 while 650,607 shares were sold.

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