Scotts Miracle-Gro (NYSE: SMG) is a cannabis-ancillary stock that aligns the manufacturing, marketing, and distribution of products and accessories for gardening. But what are 10 Reasons why is SMG a smart buy and hold opportunity?
Strong Fundamental Outlook for SMG Stock
Scotts Miracle-Gro is the leading consumer products marketer for lawn and garden care. During the gold rush, the folks selling picks and shovels got rich, not the miners. SMG supplies the cannabis and hemp industry with all the tools they need to cultivate high quality products but takes on none of the risk associated with growing the product themselves.
Their commitment to cannabis and hemp is outlined by their corporate statement: “We support states’ efforts to develop responsible and effective regulation governing legalized cannabis. This support includes engaging with state and federal lobbying consultants and providing consistent, sustaining support to a 501(c)4, The Good Growth Alliance, to advance policy and educational efforts related to a variety of issues that impact society, our business and our customers and consumers; including legalization efforts.”
Related: 4 Hot Hemp Stocks to Buy Now
Company wide sales have not slowed a bit during covid-19 in 2020 or 2021 (a rarity across the industry). SMG reported 16% increases in sales during 2021 company wide. Their business arm Hawthorne (sells to cannabis cultivators) is expecting 30 to 35% growth for all of 2022.
Will SMG stock price improve from where it is today at US$139.54? We think so!
Their branding is very strong, exclusive agreements with Monsanto and others have them locked in and strong sales in backyard gardens during quarantine periods in the USA have sales up for 2020. For the first six months of 2020 they’ve already reported sales of $1.75 billion (up 18% of 2021) with Hawthorne’s contribution up 51%! In terms of cannabis stocks we think they are as strong of a buy as it gets and 2022 should yield nice returns.
10 Reasons Why is SMG Stock is a Smart Buy and Hold Opportunity: Technical Analysis
Below you’ll find the monthly chart since company IPO in the early 90’s.
Here are 10 reasons why we believe SMG is a smart buy and hold opportunity.
- SMG retesting trend line from the sell off from $240 plus a share
- Buyers continue showing interest here last few months as they have been interested around $140 a share
- SMG dividend yield of 2% is quite attractive
- If the $140 to $130 area breaks then the lower support is around $80 a share
- Long term trend for SMG is bullish
- We see psychological support also at $100 a share
- Market cap currently at $7B at $133 a share
- Long term prospects look good and dividend yield is nice
- Long term holders have stops below $60 a share, which did not get tested during covid panic lows of $80 a share
- SMG insiders keep buying shares
10 Reasons Why is SMG a Smart Buy and Hold Opportunity
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