#4 - Scotts Miracle-Gro (NYSE:SMG)
Scotts Miracle-Gro (NYSE: SMG) - One of the back door ways to invest in marijuana is through a “picks and shovel” stock like Scotts Miracle-Gro. These stocks are cashing in on the booming growth of marijuana as an industry by providing companies with the means to grow and cultivate the plant. Scotts does this through a separate business unit, Hawthorne Gardening, which sells hydroponics, lighting, and related equipment to the cannabis industry. Their pending acquisition of Sunshine Supply will help the company accelerate Hawthorne’s growth and scale. The stock is not a pure cannabis play, and while not an inexpensive stock it is a value at 18X forward earnings-per-share, not to mention the opportunity to grab a 2.7% dividend yield. But investing in this stock will require patience. It dropped more than 60% in 2018, hitting its two-year low. And if you look specifically at Hawthorne, it suffered a 27% revenue drop if acquisitions are removed. With Hawthorne, Scotts is trying to operate a start-up inside a big company. This could be difficult as investors who want to invest in Scotts core business unit may be turned off by their foray into marijuana, and pure cannabis investors may find the stock to be less attractive than the leading players. Still, the stock certainly seems to be in oversold territory and any improvement in its core business should provide a lift to the stock.
About Scotts Miracle-Gro
The Scotts Miracle-Gro Company, together with its subsidiaries, manufactures, markets, and sells products for lawn, garden care, and indoor and hydroponic gardening in the United States and internationally. It operates through three segments: U.S. Consumer, Hawthorne, and Other. The company provides lawn care products, comprising lawn fertilizers, grass seed products, spreaders, and other durable products, as well as lawn-related weed, pest, and disease control products; and gardening and landscape products, which include water-soluble and continuous-release plant foods, potting mixes, garden soils, mulches and ground cover products, plant-related pest and disease control products, organic garden products, and live goods and seeding solutions.
Read More - Current Price
- $69.44
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $73.00 (5.1% Upside)
