Tractor Supply Company (TSCO): A Bull Case Theory

We came across a bullish thesis on Tractor Supply Company (TSCO) on Flyover Stocks’ Substack. In this article, we will summarize the bulls’ thesis on TSCO. Tractor Supply Company (TSCO)’s share was trading at $49.70 as of 23^rd May. TSCO’s trailing and forward P/E were 24.73 and 23.70 respectively according to Yahoo Finance.

Tractor Supply Company (TSCO) stands out as a rare retail business with a strong economic moat, evidenced by an unusual FTC antitrust investigation into its 2021 acquisition of Orscheln Farm and Home. Unlike most retail sectors, where competition quickly erodes advantages, the FTC recognized TSC’s unique dominance in the brick-and-mortar farm store niche, highlighting that online alternatives cannot replicate the hands-on, knowledgeable shopping experience critical to its rural customers.

The physical nature of many farm products—large, heavy, and impractical to ship—further cements TSC’s position. This moat has proven resilient against big-box competitors like Walmart and Home Depot, who have failed to capture this specialized market. Founded and headquartered in Brentwood, Tennessee, TSC targets a distinct demographic of hobby farmers—individuals managing acreage and animals for personal rather than commercial use—focusing heavily on animal products, a segment not easily duplicated by others.

The company’s story includes a key personal lesson for investors: spotting undervalued quality early is crucial, as seen when TSC’s stock was trading at 10x earnings in 2009, only to soar by 3,750% over the next 16 years. TSC’s strategic positioning in rural and exurban areas, away from typical retail hotspots, coupled with a specialized product offering, creates barriers to entry for competitors and drives steady growth. Trading at a reasonable 23.3x next-year earnings with a 1.8% dividend yield, Tractor Supply exemplifies how a niche-focused, well-managed Flyover Stock can deliver outsized long-term returns while maintaining a durable competitive advantage in an otherwise challenging retail environment.

Tractor Supply Company (TSCO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held TSCO at the end of the fourth quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of TSCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSCO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.