This Marijuana Stock Just Raised Guidance -- Time to Buy?
Buy on the rumor and sell on the news. While long-term investors should, and do, usually ignore such maxims, it's worth noting that such short-term trading movements do influence the timing of an entry point into a stock. These matters should concern potential investors in Scotts Miracle-Gro (NYSE: SMG) because they go a long way toward explaining what's going on with the stock right now. Here's a look at what happened and an investment appraisal for the company.
The company's second-quarter earnings release in May probably created a lot more than a rumor that its full-year guidance would have to be raised eventually. After all, overall sales were up 18% in the first half, with sales in the U.S. consumer segment (lawn and gardens) up 11% and Hawthorne (hydroponics for cannabis and indoor gardens) up a whopping 51%. However, at the time management merely maintained guidance for full-year U.S. consumer sales to be up 1% to 3%, while Hawthorne full-year sales guidance was only raised to 30% to 35% from 12% to 15% previously. Overall full-year sales were expected to grow just 6% to 8%.
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Source Fool.com
