UBS’ Bottom Quant Stocks In AI, IT, Healthcare & Others: 29 Stocks In All Sectors

7. Tractor Supply Company (NASDAQ:TSCO)

Number of Hedge Fund Investors In Q2 2024: 35

Sector: Consumer Cyclical

Tractor Supply Company (NASDAQ:TSCO) is a diversified rural products company that sells tools, hardware products, footwear, toys, snacks, and other items. This benefits in the form of diversification, as several of Tractor Supply Company (NASDAQ:TSCO)’s products such as pet food and farming supplies are defensive in nature. Consequently, despite being a cyclical stock, the shares are up 34% year to date. Like Walmart, Tractor Supply Company (NASDAQ:TSCO) has also built its business on the ability to offer consumers the lowest prices through an everyday low-price model. This has worked well in its favor in an inflation-driven economy by allowing it to beat analyst estimates in some quarters. However, during its fiscal Q3, Tractor Supply Company (NASDAQ:TSCO)’s $3.47 billion in revenue missed analyst estimates of $3.49 billion as inflation and high rates continued to take a bite out of consumer spending. Therefore, future performance depends on consumer health in rural and agricultural communities.

Tractor Supply Company (NASDAQ:TSCO)’s management commented on consumer spending during the Q3 2024 earnings call. Here is what they said:

“As we plan for the fourth quarter, we continue to anticipate that our customers remain prudent with their spending as is typical in an election year. We are capitalizing on our strengths and enhancing our competitive edge in the market with the support of our team members, their strong connections with our customers, and our successful strategic initiatives, we continue to outpace our competitors.”