Scotts Miracle-Gro Company Class A SMG

Scotts Miracle-Gro (SMG) just took a hard look at its balance sheet by redeeming US$250 million of 5.250% Senior Notes due 2026 and renewing a US$750 million accounts receivable facility with JPMorgan Chase. The recent refinancing comes as Scotts Miracle-Gro trades against a softer backdrop, with the share price at US$53.93, a 30-day share price return down 9.44%, and a 90-day share price return down 16.63%. At the same time, the 3-year total shareholder return is up 20.01% while the 5-year...

Scotts Miracle-Gro has seen its share price decline over several timeframes, which puts fresh attention on whether the current US$53.93 level is supported by the cash the business is likely to generate. With the focus on its cash flows, the key issue is how that stream compares to what the market is paying today. Over the past 5 years the stock has fallen 55.1%, which puts long term shareholders squarely focused on whether the present valuation still lines up with the cash the business can...