Tractor Supply Co. (TSCO) is a store for farmers whose full-time job isn't farming. The farm-supply retailer, which focuses on hobby farmers, opened 111 new stores in the first ten months of 2002, bringing its total number of stores to 431.
Frank Sustersic, manager of Turner Micro Cap Growth fund, says Tractor Supply has plenty more seeds to sow. Sustersic's fund looks for tiny companies with big earnings and sales growth. He likes Tractor Supply in particular for its competitive advantage and ability to raise prices. "There's a lot of room for expansion," he says. "The market's nowhere close to saturated."
Indeed, the company plans a major expansion into the West in 2003. Meanwhile, its stock has been plowing ahead. The price per share soared from $21 when Kiplinger's wrote about Tractor Supply a little over a year ago to $41 today. It trades at 20 times estimated 2003 earnings of $2.13 per share. Analysts polled by Thomson Financial/First Call expect 15% earnings growth, on average, over the next three to five years.
