Scotts Miracle-Gro Company (The) (SMG) Shares Slip, Investors Watching Closely, Here is Why

Scotts Miracle-Gro Company (The) (NYSE: SMG) shares fell in early trading yesterday lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.

Meanwhile in early trading, the Dow Jones Industrial Average DJIA, +0.31% rose 24 points, or 0.1%, to 19,883, while the S&P 500 index ESH7, +0.13% dipped less than 1 point to 2,268. The Nasdaq Composite COMP, +0.02% which reached its fourth-straight record close on Tuesday, rose 1 point to 5,553.

Shares of Scotts Miracle-Gro Company (The) (NYSE: SMG) were downgraded by analysts at SunTrust Banks, Inc. in a note to their investors today. The company currently has a rating of Hold on the shares. A number of other analysts have commented on the company in recent days, and Scotts Miracle-Gro Company (The) has earned a consensus one-year price target of $97.33, higher than the opening price of $93.74, a difference of 10.51 percent. Scotts Miracle-Gro Company (The) stock has a 52-week high of $98.82. Downgrades are more likely when analysts feel that the future prospects for the security have diminished from the initial recommendation, often due to a material and major digression in the company’s actions, future direction or industry.

Yesterday Scotts Miracle-Gro Company (The) (NYSE: SMG) shares last traded at $92.61, which is a dip of $2.21 from the previous closing price. Opening at $93.74, they varied from $92.49 and $93.95 throughout the day.

Scotts Miracle-Gro Company (The) (NYSE: SMG) currently has a market cap of 5.56B.

Scotts Miracle-Gro Company (The) (NYSE: SMG) Average Daily Trading Volume

The stock’s average daily volume is 569,714 shares out of a total float 59,929,000 and some 112,873 shares traded hands yesterday, 82 percent below the norm. lower than normal. Look for trading volume to pick up in the coming days as swing traders often use swings in trading volume to identify heavy volume accumulation or distribution by institutional investors.

While increased trading for short periods will not mean much will not mean much, conversely, a trend of heavy trading volume on the buy side over a period of days or weeks sends a positive signal to market traders that institutions may be moving in, so institutional sponsorship is very important.

Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.

These instituitional investors have teams of analysts researching thousands of stocks, so it is good corroboration to see them taking a postion in a stock you’re researching.

Scotts Miracle-Gro Company (The) (NYSE: SMG) Moving Averages

A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.

This is because the average acts like a floor (support), so the price bounces up off of it.

In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.

By identifying trends, moving averages allow investors to make those trends work in their favor and increase the number of successful trades.

With that in mind, Scotts Miracle-Gro Company (The) (NYSE: SMG) now has a 50-day MA of $93.97 and 200-day MA of $84.25. It has traded in a 52-week range between $62.72 – 98.82 and today’s last price is 6.28%% lower than the 52 week high of $98.82.

Earnings growth is an important factor to research when investing in stocks and investors identify companies that have grown their earnings at least 25% or more for 3 consecutive years.

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