Tractor Supply (TSCO) Highlighted As Strong And Under The Radar Stock Of The Day

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Tractor Supply ( TSCO) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Tractor Supply as such a stock due to the following factors:

  • TSCO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $71.5 million.
  • TSCO is making at least a new 3-day high.
  • TSCO has a PE ratio of 30.7.
  • TSCO is mentioned 1.87 times per day on StockTwits.
  • TSCO has not yet been mentioned on StockTwits today.
  • TSCO is currently in the upper 20% of its 1-year range.
  • TSCO is in the upper 35% of its 20-day range.
  • TSCO is in the upper 45% of its 5-day range.
  • TSCO is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on TSCO:

Tractor Supply Company operates retail farm and ranch stores in the United States. The stock currently has a dividend yield of 0.8%. TSCO has a PE ratio of 30.7. Currently there are 13 analysts that rate Tractor Supply a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Tractor Supply has been 1.1 million shares per day over the past 30 days. Tractor Supply has a market cap of $10.6 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.47 and a short float of 4.6% with 6.97 days to cover. Shares are down 1.6% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Tractor Supply as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • TSCO's revenue growth has slightly outpaced the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 12.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TRACTOR SUPPLY CO has improved earnings per share by 19.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRACTOR SUPPLY CO increased its bottom line by earning $2.33 versus $1.90 in the prior year. This year, the market expects an improvement in earnings ($2.61 versus $2.33).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 18.3% when compared to the same quarter one year prior, going from $64.77 million to $76.60 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Specialty Retail industry and the overall market, TRACTOR SUPPLY CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • TSCO's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.07 is very weak and demonstrates a lack of ability to pay short-term obligations.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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