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Marijuana Stock Pick Scotts Miracle-Gro: A Strong Buy and Hold

We all know that investing in the cannabis industry can be quite risky as most marijuana stocks have been in a tailspin the past twelve months. However, many ancillary cannabis companies can still capitalize on the explosive growth of the cannabis industry without the same level of risk as some marijuana stocks like Tilray (TLRY), Canopy Growth (CGC), or Organigram (OGI). Enter Scotts Miracle-Gro (SMG) – a strong marijuana stock to buy and hold onto for 2020 with steady, consistent returns

Marijuana Stock Pick: Scotts Miracle-Gro

Marijuana Stock Pick Scotts Miracle-Gro, A Strong Buy and Hold

Lawn and garden juggernaut, Scotts Miracle-Gro (NYSE:SMG) is a great parallel cannabis stock investment with it’s significant exposure to the marijuana industry and limited risk as it doesn’t actually produce or touch marijuana. Its marijuana-focused subsidiary, Hawthorne Gardening (witch Scott’s acquired in 2015 for $250 million) manufactures and distributes hydroponic cannabis cultivation equipment – which is the preferred method by many indoor growers. 

Hawthorne has been critical in Scotts’ ability to drive continual growth. Scotts recently announced its Q2 results on its May 6th, 2020 earnings call, and confirmed that Hawthorne’s YoY sales were up by nearly 60%. Scotts still has great market penetration in its primary lawn and garden business. However, the YoY growth for their lawn and garden lines grew by a more meager 10%. 

On the earnings call, Scotts CEO, Jim Hagedorn, said that “for the week ending May 3, we recorded our strongest seven-day period in company history with consumer purchases of more than $190 million at our largest four retail partners.” If you’ve been respecting your local stay-at-home orders, you know that this is record is the likely outcome of the coronavirus crisis. 

As an aside, my wife Emily and I have been working on our garden here at our Denver, Colorado home for the past several weekends – likely using several Scotts branded gardening products without even being aware.

Why is Scotts Miracle-Gro a Strong Buy and Hold?

Marijuana Stock Pick Scotts Miracle-Gro, A Strong Buy and Hold

For fiscal 2020, the company has reaffirmed its sales growth outlook for the U.S. It now anticipates that sales in the Hawthorne segment will rise by approxiamtely 30-35% in fiscal 2020. Based on these assumptions, it projects sales growth between 6-8% for the full year. Currently, the Scotts adjusted EPS is $4.50 which is up nearly 24% YoY. Scotts carries a current Zachs Rank of #2 (Buy). This is all good news and this is why we recommend adding SMG marijuana stock to your watch list or even picking up a few shares to start investing in cannabis stocks now.

Marijuana Stock Pick Scotts Miracle-Gro: A Strong Buy and Hold

About Cannin: Your Marijuana Investment Experts

Marijuana Stock Pick Scotts Miracle-Gro, A Strong Buy and HoldCannin is your trusted resource for information about marijuana and hemp stock investment opportunities. Our global team of experts evaluates all emerging marijuana and hemp stock investing opportunities. We aggregate hundreds of hours of research and provide tips on the best marijuana and hemp stock investments for 2020. We provide the latest marijuana investment and hemp investment news and analysis. 

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