Tractor Supply (TSCO) is a very nice company. It’s a real company with a consistent flow or customers, sales and profits. TCSO is the best stock in the Homebuilder sector, unfortunately the smart money knows this. That’s why TSCO isn’t on sale.
One Year Chart
2012 was great for the homebuilders, and Tractor Supply capitalized on this early in the year with strong profit growth. Unfortunately, the stock was too-high-to-buy when the great figures were being released earlier in 2012.
Now profit growth has moderated to the 18%, 19% range (that’s a tight range). TSCO should be able to grow at that rate in the future through a combination of same store sales increases of 4% to 5% and opening new stores at a rate of 8% a year. The Estimates here look poor, but profit growth is expected to pick up to the high-teens later in 2013.
Fair Value
TSCO is a good buy when its P/E is 20. Then one could hold for the long-term and not have to track the stock . Unfortunately the smart money knows what a good stock this is.
Sharek’s Take
Tractor Supply is a great company. Its the best in the Homebuilder sector. Unfortunately others know what a winner TSCO is and that’s why the stock isn’t on sale. Keep this on the radar and look to buy-to-hold at $87. Since TSCO is only a 18% to 19% grower I will look at the stock if it gets undervalued. The one-year chart shows TSCO was around $70 a year ago. The mid-70s would be a great place for me to buy.
View the Earnings Table here.View the Ten Year Chart here.
