Scotts Miracle-Gro: Pull-back is a buying opportunity

Further, Scotts long-term growth story (pun intended) remains intact: rising demand for lawn/garden products in the U.S. (about 80% of revenue) as the nation's housing sector continues to mend, followed by a slower recovery in international sales (about 20% of revenue).

The First Call FY2010/FY2011 EPS estimates for SMG are $3.12 to $3.57. That $3.12 FY2010 EPS estimate will likely prove to be low.

Technically, Scotts' stock has pulled-back from 2009 highs around $44, and it has dipped below the key, 50-day moving average, as well, but view the latter as year-end and seasonal profit-taking by selected institutional investors: It's a good opportunity to scoop up some of SMG's shares.

Stock Analysis: Scotts Miracle-Gro is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in SMG now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your SMG position before February 2010. Sell/stop loss if you were to buy shares in this company: $17.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.