5. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Shareholders In Q1 2024: 32
Tractor Supply Company (NASDAQ:TSCO) is a specialty tools and hardware company that sells products that are used by farmers. May 2024 was an important month for the firm as it saw Tractor Supply Company (NASDAQ:TSCO) open its tenth distribution center in Arkansas. Covering an area of 1.1 million square feet, the facility is the firm’s largest to date and shows its faith in capturing more market share. Ahead of Tractor Supply Company (NASDAQ:TSCO)’s first quarter earnings in April 2024, Evercore ISI kept its Outperform rating on the shares and a $275 share price target. Evercore highlighted that web traffic and consumer data suggested that Tractor Supply Company (NASDAQ:TSCO) could grow its market share in the future.
As of Q1 2024 end, 32 out of the 933 hedge funds profiled by Insider Monkey were Tractor Supply Company (NASDAQ:TSCO)’s stakeholders. Robert Joseph Caruso’s Select Equity Group held the largest stake which was worth $500 million.
Tractor Supply Company (NASDAQ:TSCO)’s price to forward earnings ratio is 27.55 which is higher than the market’s 21. TSCO is one of the beneficiaries of the pandemic that haven’t given back the gains the company made. TSCO shares have gained a stunning 210% over the past four years, which is considerably higher than the 37% revenue growth between 2020 and 2023. TSCO managed to increase its EPS from around $4.7 in 2019 to $10.09 in 2023. However, the meteoric rise in both revenue and EPS seems came to an end as analysts expect a 2024 EPS of only $10.38. Investors are paying a PE multiple of 27 for a stock that’s growing its EPS by 3% now. Bullish investors believe that TSCO’s 2024 earnings are temporarily depressed, and the stock will resume its growth once interest rates normalize. The company also believes that it is a “growth” stock because of the recent urban to rural migration trends. Here is what the company said in its earnings call:
“We do not see additional downward deflationary pressures in the current environment. The transition from an inflationary cycle to a disinflationary cycle is playing out as we anticipated. In spite of a very challenging housing market, we continue to see positive migration trends to our markets. While rural migration trends have moderated from the recent piece, rural America gained population in 2023. This marks the fourth consecutive year of growth in rural population. It is our view that the sensitive community found in our markets, and perhaps more importantly, the ability to secure a piece of property at a reasonable price has ensured the rural migration trend is one that’s here to stay for the time being.”
