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Dump Aerogrow (AERO:NASDAQ) Shares

Posted June 26, 2008

Sales almost tripled over the past year for Aerogrow (AERO:NASDAQ). You’d think this would make this company a winner. Unfortunately, an apparently oblivious and too-aggressive management team managed to screw it up.

by Laura Cadden, TodaysFinancialNews.com

Baltimore (TFN): Back in April, I recommended Aerogrow International Inc. After listening to the company-hosted investor conference call today, I’ve lost faith.

The company has grown enormously in the past year, yet, as stated on this call, the financial systems and capabilities the management had in place were unable to keep up.

There is a new CFO onboard, a new distribution center estimated to open in July that will greatly lower margins, a great product with good recurring revenue, and the high season (winter) for this product is approaching.

Yet, throughout this call, Mr. Perkins talks about lack of proper tools to make wiser advertising decisions, staffing and compensation issues — indeed a large reduction of their workforce in the first quarter and multiple other incidents of, as he puts it, failure to “effectively manage to the bottom line.”

The company goals continue to be extremely ambitious. Unfortunately, I feel that such a clear lack of oversight on the part of Aerogrow’s management will continue to hold this company back.

If you want to take a chance on Aerogrow… goodness knows, now is the time to buy. The stock has been battered down to about $2 today.

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Posted by Laura Cadden · Filed Under US Stocks and Markets 

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