63.51 -1.53 (-2.41%) Sell

The party never started for SMG investors as it destroyed investor wealth

13 min read

SCOTTS MIRACLE-GRO CO ranked among the worst performers on Friday. It returned -2.41% to close at 63.51 which is it's 52 week low, down -41% from it's 52 week high.

[Themes containing SMG]

Buy-and-Hold investors in SMG experienced a maximum drawdown of -21.21% over the last three months. It returned -19.54% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +10.57%.


SMG has been underperforming the SP500 index in recent time, after having outperformed till 8 Dec, 2016. Over the last 2 years 11 months and 10 days, SMG underperformed the SP500 index on 45% days. Which indicates that on days SMG underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

SMG returned losses on 54% days in the last three months. During this time, it delivered on average -0.32% per day. It delivered it's best daily return of +6.87%, during this period, on Wednesday, 7 Nov, 2018. There was initially a bullish trend during this period which started on 26 Sep, 2018 and went on till 3 Oct, 2018. The bullish trend returned +2.16% to investors. This was followed by a bearish trend that started on 3 Dec, 2018 and ended on 14 Dec, 2018. This bearish trend lost -17.69% of investor capital.

On monthly basis, SMG delivered losses in more months over the last year, than profits. SMG delivered profits less regularly than SP500 index. SMG was also a more risky investment than SP500 index as it's worst month in the last year, Jan 2018, returned -16.78% compared to -7.28% returned by SP500 index in Oct 2018. SMG had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -21.81%.

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SMG is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SMG's volatility from 8 Oct, 2018 to 12 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SMG has significant positive skewness in it's return distribution. This indicates that investors can expect SMG to recover from drawdowns quickly. Which makes SMG a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than SMG. Therefore, SP500 must receive a lower allocation than SMG in your portfolio. SMG usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in SMG), EHC is a small cap that deserves to be closely tracked for investment opportunities.

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