1. The Scotts Miracle-Gro Company (NYSE:SMG)
Number of Hedge Fund Holders: 28
With 28 hedge fund investors tracked by IM at the end of Q3 2024, The Scotts Miracle-Gro Company (NYSE:SMG) tops our list of the Best Marijuana Stocks to Buy Now. The Ohio-based company is the world’s largest marketer of branded consumer products for lawn and garden care and has applied its expertise in horticulture to develop innovative technologies and solutions specifically tailored for cannabis cultivation. SMG is also the owner of The Hawthorne Gardening Company, a leading provider of nutrients, lighting, and other materials for the indoor and hydroponic growing industry.
The Scotts Miracle-Gro Company (NYSE:SMG) has been facing several challenges over the last few years, including high debt and an unsustainable cost structure due to a decrease in demand after the pandemic. Consequently, the company has made some hard decisions and cut over $400 million in operating expenses to right-size its business. SMG has also been working to strengthen its struggling Hawthorne segment to help it overcome industry challenges and these efforts are starting to pay off. The company recently announced that it has managed to dismantle Hawthorne to make it a much smaller and more profitable business, while also reinvesting $100 million into its brands, sales force, supply chain, and innovation.
The Scotts Miracle-Gro Company (NYSE:SMG) reported a revenue of $414.7 million in its Q4 of 2024, up 10.73% YoY and beating the analysts’ estimates by over $15 million. The company also managed to over-deliver on its target of generating over $1 billion of free cash flow over two years with more than $580 million generated in 2024 on top of nearly $440 million the year before. It utilized this free cash flow to return value to shareholders through its quarterly dividend and increased balance sheet strength by lowering debt by $390 million.
Moving beyond monetary profits, The Scotts Miracle-Gro Company (NYSE:SMG) also remains committed to sustainability and collaborates with the National Fish and Wildlife Foundation to conserve monarch butterflies and other insect pollinators in 24 states in the US. The company also recently partnered with the Central Ohio Beekeepers Association and established a new bee yard at their Marysville, Ohio campus.
Overall, The Scotts Miracle-Gro Company (NYSE:SMG) ranks first on our list of the best CBD stocks. While we acknowledge the potential for SMG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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