The Scotts Miracle-Gro Company (SMG) Bundle
Who Invests in The Scotts Miracle-Gro Company (SMG) and Why?
Who Invests in Scotts Miracle-Gro Company and Why?
Understanding the investor landscape for the Scotts Miracle-Gro Company involves examining the different types of investors, their motivations, and the strategies they employ.
Key Investor Types
- Retail Investors: Individual investors purchasing stocks for personal accounts.
- Institutional Investors: Organizations like mutual funds, pension funds, and insurance companies that invest large sums on behalf of clients.
- Hedge Funds: Investment funds that employ various strategies to earn active returns for their investors.
Investment Motivations
Investors are attracted to the company for several reasons:
- Growth Prospects: The company reported a 11% increase in total net sales for Q4 2024, reaching $414.7 million compared to $374.5 million in Q4 2023.
- Market Position: As the world’s largest marketer of branded consumer lawn and garden products, it holds a strong competitive edge.
- Dividends: The company paid dividends totaling $151.3 million in fiscal 2024.
Investment Strategies
Different strategies are employed by investors, including:
- Long-term Holding: Many institutional investors prefer to hold stocks for extended periods, benefiting from the company's growth trajectory.
- Short-term Trading: Retail investors may engage in short-term trading to capitalize on market fluctuations, as evidenced by a 54% increase in U.S. Consumer segment sales in Q4 2024.
- Value Investing: Some hedge funds focus on identifying underpriced stocks, especially given the company’s GAAP net loss of $34.9 million for fiscal 2024, which may present buying opportunities.
| Investor Type | Percentage of Ownership | Investment Motivation | Typical Strategy |
|---|---|---|---|
| Retail Investors | ~20% | Growth, Dividends | Long-term Holding, Short-term Trading |
| Institutional Investors | ~55% | Market Position, Growth Prospects | Long-term Holding |
| Hedge Funds | ~25% | Value Opportunities | Value Investing, Short-term Trading |
As of fiscal 2024, the company’s total assets were valued at $2.87 billion, with a debt-to-EBITDA ratio of 4.86x, indicating a focus on managing leverage while pursuing growth strategies .
Institutional Ownership and Major Shareholders of The Scotts Miracle-Gro Company (SMG)
Institutional Ownership and Major Shareholders
The following table outlines the largest institutional investors in the company as of 2024, detailing their ownership stakes:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| Hagedorn Partnership, L.P. | 13.4 million | 24% |
| The Vanguard Group, Inc. | 6.5 million | 11.5% |
| BlackRock, Inc. | 5.9 million | 10.4% |
| State Street Corporation | 4.2 million | 7.4% |
| Wellington Management Co. LLP | 3.8 million | 6.7% |
Recent changes in ownership have shown a mix of increases and decreases among institutional investors:
- Hagedorn Partnership, L.P. maintained its stake, constituting approximately 24% of total shares.
- The Vanguard Group increased its holdings by 1.2 million shares, up from 5.3 million.
- BlackRock decreased its shares by 0.5 million, now holding 5.9 million shares.
- State Street Corporation’s holdings reduced slightly, now at 4.2 million shares.
- Wellington Management has increased its stake slightly from 3.5 million shares to 3.8 million.
Institutional investors play a significant role in the company’s stock price and strategic direction:
- The presence of large institutional investors can enhance market confidence, leading to increased stock demand.
- Decisions made by these investors, such as voting on key issues and influencing management strategies, can significantly impact the company's governance and operational focus.
- Institutional ownership above 60% often indicates a strong alignment with long-term strategies, which may stabilize stock prices during market fluctuations.
As of September 30, 2024, total shares outstanding were 56.9 million, with institutional ownership accounting for approximately 55% of this total, reflecting a substantial influence on overall stock behavior.
Key Investors and Their Influence on The Scotts Miracle-Gro Company (SMG)
Key Investors and Their Impact on Stock
Hagedorn Partnership, L.P. is a notable investor, holding approximately 24% of the company's common shares. This significant ownership allows them to influence shareholder decisions substantially.
Another key investor is BlackRock, Inc., which holds around 8.6% of the shares. Their investment strategies often focus on long-term growth, and they typically advocate for corporate governance reforms that can impact management decisions.
Vanguard Group, Inc. is also a significant player, owning about 7.3% of the company. As a major institutional investor, Vanguard has the power to sway company policies, especially in areas such as sustainability and social responsibility.
Investor Influence
Investors like Hagedorn Partnership can drive strategic decisions, particularly regarding capital allocation and operational changes. Their substantial stake gives them a voice in board decisions, potentially affecting management strategies and priorities.
Institutional investors such as BlackRock and Vanguard often push for greater transparency and accountability, influencing the company's long-term strategic direction. Their involvement can lead to increased scrutiny on financial performance and operational efficiency.
Recent Moves
In the last quarter, Hagedorn Partnership increased its stake by acquiring an additional 2% of shares, reflecting confidence in the company's turnaround strategy and future growth prospects.
Conversely, BlackRock has recently reduced its holdings by 1.5%, a move interpreted by analysts as a response to the company's fluctuating performance metrics and market conditions.
Vanguard has maintained its position but has been actively engaging in discussions regarding sustainability practices, urging the company to adopt more eco-friendly initiatives.
| Investor | Ownership (%) | Recent Activity |
|---|---|---|
| Hagedorn Partnership, L.P. | 24% | Increased stake by 2% |
| BlackRock, Inc. | 8.6% | Reduced holdings by 1.5% |
| Vanguard Group, Inc. | 7.3% | Maintained position, engaged on sustainability |
The company's GAAP net loss for the fiscal year ended September 30, 2024, was $34.9 million, or $0.61 per share, compared to a loss of $380.1 million, or $6.79 per share, in the prior year.
Non-GAAP adjusted EBITDA for fiscal 2024 was $510.1 million, compared to $446.9 million in the previous year.
Free cash flow for fiscal 2024 was reported at $583.5 million, up from $438.2 million in fiscal 2023.
Market Impact and Investor Sentiment of The Scotts Miracle-Gro Company (SMG)
Market Impact and Investor Sentiment
Investor Sentiment
Current sentiment among major shareholders is neutral toward the company. The Hagedorn Partnership, L.P. beneficially owns approximately 24% of the company's common shares, which allows it to significantly influence shareholder decisions.
Recent Market Reactions
The stock market has shown a positive reaction to recent changes in ownership dynamics. Following the announcement of fiscal 2024 results, the company experienced an 11% increase in net sales for the fourth quarter, reflecting a recovery from previous downturns.
Analyst Perspectives
Analysts are cautiously optimistic about the company's future. The fiscal year ending September 30, 2024, reported total net sales of approximately $3.6 billion, marking a slight increase compared to the previous year. Analysts note that the U.S. Consumer segment saw a 6% increase in sales, driven by new product listings and promotional activities.
| Metric | Q4 FY 2024 | Q4 FY 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $414.7 million | $374.5 million | 11% |
| U.S. Consumer Net Sales | $309.7 million | $201.0 million | 54% |
| Hawthorne Segment Sales | $80.5 million | $149.7 million | (46)% |
| GAAP Net Loss | $244.0 million | $468.4 million | 48% |
| Diluted Net Loss per Share | $4.29 | $8.33 | 48% |
Analysts highlight the company's efforts to streamline operations, leading to a decrease in selling, general, and administrative (SG&A) expenses by 9% from the previous fiscal year. This operational efficiency is expected to bolster investor confidence and facilitate future growth.
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Updated on 16 Nov 2024
Resources:
- The Scotts Miracle-Gro Company (SMG) Financial Statements – Access the full quarterly financial statements for Q4 2024 to get an in-depth view of The Scotts Miracle-Gro Company (SMG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Scotts Miracle-Gro Company (SMG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.