Tractor Supply Co (TSCO) is a virtual monopoly, supplying rural areas with everything they need from fencing, farm tools, footwear, farm gear, pet feed and supplies. With 1,630 stores it has a first mover advantage in rural areas where it is able to charge a healthy premium as it has largely avoided competition from the big retailers and ecommerce. This looks set to continue as rural areas don't meet the return of investment requirements of the big retailers, TSCO's heavy products are not suitable for drone delivery and the firm has generated brand loyalty from customers who enjoy meeting at its stores and catching up with a chat.
This has allowed TSCO to grow sales by 9% CAGR over the past 3 years and EPS by over 12% to $3.27 in 2016. Consensus forecasts are for EPS of $3.62 next year and $4.01 in 2019.
Despite its excellent prospects the SP has fallen by 25% from 52 week highs and is now trading on a TTM PE of 17.7 and forward PE of 14.6. It appears that TSCO’s best bargain may be its own shares.
This is not a recommendation to buy or sell. Stocks are not suitable for all investors. Please do your own research
Submitted October 19, 2017 at 12:40AM by InterestingNews1 http://ift.tt/2ywXZ5d
