Brendan CaldwellTractor SupplyTSCOPAST TOP PICKOct 02, 2023

It's been a long-term hold, doing amazing over 25 years. Don't buy it here, because the farm economy is slowing and TSCO is selling around 25x PE and the forecast growth rate is 3-4% which is a little high for a stock like this. Don't panic and sell this, but hold if you own. Buy if this falls 10-15%.

Doesn't like the retailers.

Their last quarter wasn't good, missing across the board and slashing their full-year forecast, down to 1.3-2.5% growth. Analysts then cut their targets and lowered their signals. He targets 22x 2024 PE or $246 or a 21% gain. You can buy a tranche this now. It's a reliable retail name. Short-term is unpredictable, but long term it's solid.

(A Top Pick Nov 09/22, Up 10%)

They target hobby farmers who need lawnmowers, snow blowers, livestock feed, etc. Their customers have higher than usual disposable incomes and live outside cities, so their living expenses are lower. Also, they live in remote areas away from Costcos and other shops. TSCO has 2,000 stores in the US and keep opening a hundred or so annually. They keep growing same-store sales, though the rate has been declining lately. Offers good historic growth. Continues to like this.

He liked consumer stocks a lot until several months ago. We have now gotten into a time period where he thinks the gasoline price is up 15% year-over-year, which is a tax on the consumer. We are also starting to feel the effects and hear the complaints about how much healthcare costs have gone up. This explains the underperformance of any consumer stocks. This company was recommended to him as being interesting because they were able to generate some same-store sales growth until recently. They sell to hobby farmers, and he doesn’t know how to analyse that.

(Top Pick Jun 7/16, Down, 12.78%) Largest recreation retailer to the hobby ranchers in the US. A weak second quarter was caused by weather. Same store sales were down 0.5% vs. expectations of up 3% and caused the stock to come down.