Scotts Miracle-Gro looks to cash in on the business of marijuana growth

[ckf]

Scotts Miracle-Gro is squaring up to cash in on the marijuana business -- and JP Morgan is betting its stock will go higher.

Scotts, a lawn and garden supplier, is buying up a few businesses involved in hydroponics, a method used to grow pot without soil.

 

On Thursday Jeffrey Zekauskas, an analyst with JP Morgan, upgraded his outlook for the company's stock and raised its target price from $70 to $85.

"The hydroponics market taps into marijuana demand and the company now has a growth option that we think an investor is able to capture for about the price of the traditional business," Zekauskas said, according to a Barrons blog post.

Soon after the stock was upgraded, Scotts (SMG) hit an all time high of $80.14.

That bested the previous all-time high set Wednesday after Scotts issued its latest earnings update. Despite sub-par earnings that the company blamed on poor weather conditions earlier this year, CEO Jim Hagedorn told investors that the company is finalizing its third "significant acquisition in the hydroponics space."

"As we had promised, we are now beginning the transition away from acquisitions and will begin a more aggressive return of cash to shareholders," Hagedorn said in a press release.

Its stock is now up more than 23% year to date.

Wall Street has been bullish on marijuana, as legal sales have skyrocketed due to more states adopting recreational and medical marijuana laws. In 2015, sanctioned pot sales grew to $1.2 billion, more than triple the 2014 numbers.

[Zambroski]

Feed your weed....FEED IT!

[Anler]

Marijuana is awesome...

[BOHICA]

If you think some of the chemicals and modifications that the likes of montasanto are bad just wait till it is 100% legal and they get there hands on it and increase its profitability.

[Zambroski]

[Momorider]

4 minutes ago, Zambroski said:

[Zambroski]

[Capt.Storm]

so cigs are out and pot is in with the gov..who would have thought that in the 70's that it would actually happen.

[soupkid]

MG works, I do my flowers and small garden once a week and even with the heat we have been having this summer they all look great.

My tomatoes are almost 4 feet high loaded with tomatoes.

[Capt.Storm]

Mg is slow release fertilizer..good stuff.

[racer254]

3 hours ago, Capt.Storm said:

so cigs are out and pot is in with the gov..who would have thought that in the 70's that it would actually happen.

Because the hippies in the 70's that didn't go to Vietnam are the politicians of NOW. 

[ArcticCrusher]

5 hours ago, racer254 said:

Because the hippies in the 70's that didn't go to Vietnam are the politicians of NOW.