In a recent move, Hagedorn Partnership, L.P., a significant shareholder in Scotts Miracle-Gro Co (NYSE:SMG), has sold a substantial number of shares in the company. The transactions, which took place on August 21 and 22, resulted in the sale of Scotts Miracle-Gro shares totaling over $7.9 million.
The sales were executed in multiple trades, with prices ranging from $70.47 to $71.87 per share. Specifically, on August 21, Hagedorn Partnership sold 78,679 shares at an average price of $70.85 and 6,451 shares at an average price of $71.87. The following day, the partnership continued its selling activity, disposing of 22,163 shares at an average price of $70.47 and 4,301 shares at an average price of $71.09.
Hagedorn Partnership, which is known to be a ten-percent owner of Scotts Miracle-Gro, conducted these sales directly. Post-transaction, the partnership still holds a significant number of shares in the company, with the last reported amount being 13,581,774 shares following the final sale.
The transactions were disclosed in a regulatory filing with the prices reflecting the weighted average sales price. The partnership has indicated that detailed information regarding the number of shares sold at each separate price is available upon request by the Commission staff, the issuer, or a security holder of the issuer.
It is worth noting that the general partners of Hagedorn Partnership disclaim beneficial ownership of the reported securities, except to the extent of their pecuniary interest therein. This disclaimer is a common practice in such filings to clarify the nature of the ownership and control over the reported shares.
Investors and market watchers often pay close attention to insider transactions such as these for insights into the perspectives of major shareholders and executives regarding the company's stock.
In other recent news, Scotts Miracle-Gro reported a strong Q3 performance, with notable growth in its U.S. Consumer lawn and garden business and a profitable quarter for its Hawthorne Division. The U.S. Consumer segment saw an 11% increase in net sales, reaching $1 billion, while the Hawthorne Division experienced a 6% rise in branded sales and a remarkable 144% increase in profit. The company is on track for 5% to 7% net sales growth and anticipates an adjusted EBITDA of $530 million to $540 million by the end of the fiscal year.
Scotts Miracle-Gro plans to generate $1 billion in free cash flow, reduce debt by $350 million, and achieve above 30% adjusted gross margins within the next three years. The company also intends to invest an additional $25 million into its brands and has appointed Martha Stewart as the Honorary Chief Gardening Officer for 2025. These are recent developments that reflect the company's commitment to growth and innovation.
Despite these positive developments, Scotts Miracle-Gro acknowledges challenges such as poor weather affecting grass seed sales and the need for improvement in the lawn fertilizer category. However, the company remains optimistic about Q4, expecting a 50% increase in sales year-over-year, and is confident in the strategic importance of live goods and the success of the Hawthorne business.
InvestingPro Insights
The recent insider transactions involving Hagedorn Partnership's sale of Scotts Miracle-Gro Co (NYSE:SMG) shares come at a time when the company's market position presents a mix of challenges and opportunities. According to InvestingPro data, Scotts Miracle-Gro currently holds a market capitalization of $4.09 billion, reflecting the market's valuation of the company.
Despite a negative revenue growth of 4.3% over the last twelve months as of Q3 2024, the company has shown a positive quarterly revenue growth of 7.46% in Q3 2024. This suggests a potential rebound or seasonal strength in the company's financial performance. The gross profit margin stands at 26.01%, indicating the company's effectiveness in managing its cost of goods sold relative to its sales.
One of the InvestingPro Tips highlights the company's high shareholder yield, which is further substantiated by a solid dividend yield of 3.81% as of the last dividend ex-date on August 23, 2024. This could be a signal of the company's commitment to returning value to shareholders, which has been consistent over the past 20 years. Additionally, while the company was not profitable over the last twelve months, analysts anticipate a return to profitability this year, which may be an encouraging sign for investors.
For those looking to delve deeper into Scotts Miracle-Gro's financials and future prospects, InvestingPro offers additional insights. Currently, there are 7 more InvestingPro Tips available, which can provide investors with a more comprehensive analysis of the company's financial health and stock performance. These tips can be accessed through the InvestingPro platform at https://www.investing.com/pro/SMG.
Moreover, the InvestingPro Fair Value estimate stands at $74.53, which is below the analyst target of $82 but above the previous close price of $69.32. This discrepancy offers a perspective on the potential undervaluation or overvaluation of the stock, depending on the market's future expectations and the company's ability to meet them.
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