CNBC’s Jim Cramer on Thursday informed financiers to withstand the desire to include Scotts Wonder-Gro to their portfolios, regardless of the stock’s low assessment.
“Historically, this is a great time of year for anything garden related because it’s planting season, and Scotts is a name that we used to get a ton of questions about. … But, over the past thirteen months, these shares have been obliterated,” the “Mad Money” host stated.
“While ScottsMiracle-Gro might seem cheap on a price to earnings basis, the problem is that the earnings forecast keeps coming down … and management doesn’t have a handle on how bad it’s going to get,” he later on included.
Scotts Wonder-Gro stock fell 6% onThursday The business reported better-than-expected profits in its previous quarter 2 days in the past.
JPMorgan updated Scotts Wonder-Gro to obese from neutral on Wednesday, indicating the stock’s assessment, high margins and market management. Stifel devalued the stock from obese to hold.
Cramer stated that he concurs with Stifel’s more bearish position on Scotts, especially since of the business’s battles with increasing raw expenses, uncertainty relating to a profits target of $8 a share and his interest in the efficiency of Scotts’ Hawthorne department. Hawthorne runs in marijuana, a market Cramer states has actually been beaten down for the in 2015.
“On top of that, Scotts has an ugly enough balance sheet that they don’t see management embracing an aggressive buyback, either. In short, business is bad and there’s not much Scotts can do to make it better,” Cramer stated.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every relocation in the marketplace.
Disclaimer
Questions for Cramer?
Call Cramer: 1-800-743- CNBC
Want to take a deep dive into Cramer’s world? Hit him up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, remarks, tips for the “Mad Money” site? madcap@cnbc.com
