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Lookback: Wedgewood Partners 2019 Tractor Supply Company (TSCO) Thesis

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Alex Smith
·3 min read
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If you are looking for the best ideas for your portfolio you may want to consider some of Wedgewood Partners top stock picks. Wedgewood Partners, an investment management firm, is bullish on Tractor Supply Co (NASDAQ:TSCO) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Tractor Supply Co (NASDAQ:TSCO) stock. Tractor Supply Co (NASDAQ:TSCO) is a retail chain company.

In October 2019, Wedgewood Partners had released its Q3 2019 investor letter. The investment firm said that Tractor Supply Co (NASDAQ:TSCO) was one of the biggest detractors to its performance in Q3 2019. The stock has posted a return of 33.4% in the trailing one year period, outperforming the S&P 500 Index which returned 14.4% in the same period. This suggests that the investment firm was right in its decision.

In July 2020, we published an article revealing Wedgewood Partners bullish investment thesis on Tractor Supply Co (NASDAQ:TSCO) stock in its Q2 2020 investor letter. This suggests that the investment firm has been bullish for a long time on Tractor Supply Co (NASDAQ:TSCO).

Wedgewood Partners fund posted a return of 0.39% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.87% in the same quarter. Let’s take a look at comments made by Wedgewood Partners about Tractor Supply Co (NASDAQ:TSCO) in the Q3 2019 investor letter.

"Tractor Supply Company’s net sales increased 6% with earnings per share up about 7% during the quarter. Tractor Supply Company lapped difficult comparisons both on a sales basis (2018 hurricane season) and profitability basis (2018 tax cut), so we would expect Tractor Supply Company to generate closer to double digit growth over a multi-year timeframe. Despite the relatively in-line quarter, the stock sold off based on what we believe are unfounded fears about the Company’s exposure to employment in energy-levered regions. Unlike 2015, Tractor Supply Company has fewer customers levered to the fortunes of oil and gas. In addition, the slowdown in oil and gas activity over the past 12 months has been much shallower relative to 2014 – 2015."

In Q2 2020, the number of bullish hedge fund positions on Tractor Supply Co (NASDAQ:TSCO) stock increased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in TSCO's growth potential. Our calculations showed that Tractor Supply Co (NASDAQ:TSCO) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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