Posted on May 20, 2020
This week’s trade returns the goose to the larder.
We’re a commodities outfit again, friends, after several weeks of looking into the increasingly silly world of equity stock-pix.
But that doesn’t mean this week’s trade is a CME staple.
Today, we’re all about agriculture and the effect the Wuhan Flu has had on preppers, farmers, weekend getaway hobbyists and full-on ranchers.
The company we’re looking at is Tractor Supply Company (NASDAQ:TSCO), operators of over 2000 “rural lifestyle” retail stores across the U.S. whose stock is up a saddle-humping 77% in the last 45 days.
The company was deemed an essential resource during the lockdown, as it provides a great many rural folk with feed, fertilizer, garden and livestock management and maintenance items, and saw a brisk business as city-slickers fled to the hills to escape the ghettoization of urban America through March and April.
Things have slowed somewhat. And while the company was quick to offer a clever, same-day delivery service to satisfy the impulsive, wanton buying fever that the bat-bite caused, the stock also got a wee too hot during that time.
Not that a 77% move always has to be overdone.
But when it’s based on the gizmo-trickery of the corporate bosses, you gotta step back a few paces and pull out your Killamauron Archery Set (lubricants not included).
A few things have to be sorted through here, but first some fundamentals.
TSCO trades with a P/E of 23, pays 1.28% annually and carries a P/B of 9.4. Not great numbers, to be sure, but it was the next one that grabbed us –
Many happy returns,