Garden Green

There was an interesting article in Sunday's Los Angeles Times' finance section (which is also the real-estate/home section, another ugly by-product of downsizing) that said that because of the rising grocery prices and a renewed interest in all things great and green, gardens are suddenly becoming popular. According to the article, sales at Burpee and other seed companies are up 30% this year alone as are sales at Armstrong Garden Centers, a local garden supply chain.

Digging for profit potential, I looked at the charts of gardening-related companies. Unfortunately, there are no publicly traded companies along the lines of an Armstrong's which means that we'll have to look at the broad-based retailers in the home and garden category. This includes Home Depot (HD), Lowe's (LOW), Conn's (CONN), Tractor Supply (TSCO), and Sears (SHLD) which owns the Orchard Supply chain.

Now Home Depot and Lowe's have had a nice run-up since July, parroting the movement of the homebuilders. Lately, these stocks have been pulling back and I'm not exactly sure where they're headed in the short term. If you like these guys, I'd wait for some sort of price confirmation before entering. (They're both right at their 50dma's and at minor support.)

The charts of the other three stocks look much more compelling. I like Conn's and Tractor Supply the best. Conn's broke out of a nine month base last week on heavier than normal volume. Tractor Supply is breaking through overhead resistance at $45 and if we get another day of confirmation, this would be a good entry point. Sears has already risen over 40% since July and is butting up against the $100 level. If it can break through that, I'd suggest entering maybe a half position since it's already had a good run-up.

That's about it for today. I've heard from one reader how he's getting tired of me yakking about the VIX (and frankly, I am too) so I decided to go with something completely different. So plant some seeds into this group and watch your profits grow. Hey, who said money doesn't grow on trees?