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Bear Of The Day: Scotts Miracle-Gro (SMG)

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Scotts Miracle-Gro (SMG - Free Report) is a Zacks Rank #5 (Strong Sell) and has been since May 3 of 2018.  That is almost 6 months of being a Strong Sell.  The reason the stock has been a Zacks Rank #5 (Strong Sell) is that earnings estimates keep falling.  Let's review where the numbers stand in this Bear of the Day article.

Description

The Scotts Miracle-Gro Company makes and sells consumer lawn and garden products. The company operates through three segments: U.S. Consumer, Hawthorne, and Other. The Scotts Miracle-Gro Company was founded in 1868 and is headquartered in Marysville, Ohio.

Estimates

A quick check of the detailed estimates page : https://www.zacks.com/stock/quote/SMG/detailed-estimates shows why this stock has been sliding over the last few months.

The current quarter has seen estimates drop by 20 cents over the last 90 days.

The next quarter has softened up by about 6 cents over that same time period.

When you look at the annual number, you really get a sense of what is happening.  The Zacks Consensus Estimate for 2018 moved from $4.14 to $3.77 over the last 90 days and that will cause your stock to drop.

The 2019 Zacks Consensus Estimate has fallen from $4.83 to $4.23 over the same time period.  Again, this is not what you want to see.

Reason To Speculate

Earnings estimates give you an idea of why investors are selling some stocks, but at some point, the estimates for SMG might turn around.  If they do, it could be due to the recent big moves in the pot space.  For that reason alone I want to keep SMG on my radar screen.

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