Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

Equity Bottom-Up

Scotts Miracle-Gro Co Cl A / Equity Bottom-Up

<ul>
<li>Scott’s core lawn care business is caught between rising fertilizer prices and declining demand after the Covid ‘fix-up-your-home’ wave began to dissipate.  </li>
<li>Fertilizer prices have spiked, hurting margins and “even if commodities start to ease, it will take a few years to claw back the margin we’ve lost”</li>
<li>At the same time, SMG’s cannabis growth strategy has fallen apart leading to a 65% decline in sales last quarter.  </li>
</ul>


Scott’s core lawn care business is caught between rising fertilizer prices and declining demand after the Covid ‘fix-up-your-home’ wave began to dissipate.  
Fertilizer prices have spiked, hurting margins and “even if commodities start to ease, it will take a few years to claw back the margin we’ve lost”
At the same time, SMG’s cannabis growth strategy has fallen apart leading to a 65% decline in sales last quarter.  


Scotts Miracle-Gro Company (SMG): Sell Short; Price: $84.57; August 17, 2022

<ul>
<li>The following names are "on the workbench", ie., names we are working on that look interesting from the short side. They are discussed, with charts, in the PDF attached below.</li>
<li>We like to be as transparent as possible in our short idea generation process.  </li>
<li>Today, we are flagging: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.</li>
</ul>


The following names are "on the workbench", ie., names we are working on that look interesting from the short side. They are discussed, with charts, in the PDF attached below.
We like to be as transparent as possible in our short idea generation process.  
Today, we are flagging: Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.


Short Names on Our "Workbench": Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

United States

The Scotts Miracle-Gro Company markets branded consumer lawn and garden products, as well as a full range of products for professional horticulture. The Company manufactures and markets fertilizers, pest controls, plant foods, gardening soils, grass seed, and other products in North America and Europe. Scotts Miracle-Gro also provides lawn service in the United States.

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Scotts Miracle-Gro Co Cl A (SMG US)

Scotts Miracle-Gro Company (SMG): Sell Short; Price: $84.57; August 17, 2022

Scott’s lawn care business faces declining demand after Covid. Fertilizer prices have spiked, hurting margins. SMG’s cannabis growth strategy has...

Eric Fernandez, CFA

Short Names on Our "Workbench": Scotts Miracle-Gro, Corsair Gaming, CF Indus, Gap Inc, Hub Group.

Short names on our workbench (under research) provide a window into our idea generation process. Today, we are flagging They are: Scotts Miracle...

Eric Fernandez, CFA

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