Tractor Supply (TSCO) is a good stock. The company operates Home Depot mini-me stores that also stock supplies farmers need. TSCO is a solid company, it only had one down year in profits during the last decade, and that was during the recession of 2008 when people stop spending money for a while (they were terrified of the financial downturn).
One Year Chart
Lately, TSCO has been rising so-far so-fast that things have gotten a bit out of hand. TSCO sold for 21 times earnings in my 2012 Q4 article. Now the P/E is 27. That’s high for a 17% grower.
Sure, profits have ben rocking lately, but I don’t know how long the good times will last. TSCO beat by 5 cents last quarter, but Estimates show teens-growth coming. If it beats by 5 cents this quarter profit growth will be 25%.
Fair Value
I see TSCO being worth 23 times earnings. That’s $61 today. Notice the stock spent some time in that range during the summer.
Sharek’s Take
TSCO is a great high-teens grower you can buy-and-hold. But this one year chart above is too-much too-soon. I see TSCO going through a basing period in 2014, and I think prudend investors should get in on a dip, when the P/E isn’t so damn high. Look to buy in the low-$60s.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
