Should You Invest in The Scotts Miracle-Gro Company (SMG)?

Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started with a risk-off environment from the previous quarter, but later regained momentum driven by broad-based elements. In the second quarter, the strategy delivered a return of 3.25% net of fees (3.41% gross of fees) underperforming the 8.50% total return of the Russell 2000 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second quarter 2025 investor letter, Aristotle Capital Small Cap Equity Strategy highlighted stocks such as The Scotts Miracle-Gro Company (NYSE:SMG). The Scotts Miracle-Gro Company (NYSE:SMG) manufactures and markets products for lawn, garden care, and indoor and hydroponic gardening. The one-month return of The Scotts Miracle-Gro Company (NYSE:SMG) was 6.83%, and its shares gained 3.09% of their value over the last 52 weeks. On July 22, 2025, The Scotts Miracle-Gro Company (NYSE:SMG) stock closed at $68.70 per share, with a market capitalization of $3.965 billion.

Aristotle Capital Small Cap Equity Strategy stated the following regarding The Scotts Miracle-Gro Company (NYSE:SMG) in its second quarter 2025 investor letter:

"The Scotts Miracle-Gro Company (NYSE:SMG), is a leading manufacturer of branded consumer lawn and garden products in North America. After benefitting from increased demand during the COVID lockdown years, the company experienced several years of below normal growth. As demand has begun to normalize to pre-COVID levels and the company unwinds a poorly executed diversification strategy, shareholder value is expected to be enhanced through margin expansion, balance sheet deleveraging."

The Scotts Miracle-Gro Company (NYSE:SMG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held The Scotts Miracle-Gro Company (NYSE:SMG) at the end of the first quarter, which was 33 in the previous quarter. In the fiscal second quarter of 2025, The Scotts Miracle-Gro Company (NYSE:SMG) reported net sales of $1.42 billion compared to $1.53 billion a year ago. While we acknowledge the potential of The Scotts Miracle-Gro Company (NYSE:SMG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered The Scotts Miracle-Gro Company (NYSE:SMG) and the list of best fertilizer stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.