Insiders Sell Tractor Supply Company But Everybody Else Is Buying
If you are worried about recent insider sales at Tractor Supply Company (NASDAQ: TSCO) don’t be. The insiders don’t hold enough of the shares to really matter and everybody else is buying. While insider sales are concerning, what we’re seeing at Tractor Supply Company smacks of share-based compensation more than anything else. Not only are the sales small and regularly spaced but they come from a broad array of execs and board members so there aren’t raising any red flags for us.
On the other hand, the institutions and analysts are buying the stock and we do find this to be significant. The institutions own about 83% of the shares and their holdings are growing. The institutions netted about $0.750 billion worth of shares, an amount equal to roughly 3.45% of the market cap with shares trading near $195. The institutions were net sellers in Q1 but, so far in Q2, selling activity has been at a minimum and buying on the rise. If the latest shout-out from Bank of America is indicative of future activity and we think it is, institutional buying could gain momentum leading into the next earnings report.
Bank Of America Upgrades Tractor Supply Company
The analysts rate Tractor Supply Company a firm Buy and the sentiment is strengthening. The consensus rating is up compared to 12 months, 3 months, and 1 month ago and will get stronger we think over the next quarter or two. The latest upgrade comes from Bank of America which raised the stock to Buy from Neutral while raising the price target to $260 from $250. The $260 price target is a 7% premium to the consensus target of $243.50 which is about 25% above the current price action. In Bank of America’s eyes, Tractor Supply Company deserves a premium over other hard-line retailers because of its market and discretionary-resistant product lines.
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"TSCO’s product mix—which is primarily non-discretionary products such as livestock & pet supplies, hardware/tools/truck supplies, and workwear—makes the retailer less vulnerable to the pull-back in spending that many retailers have exhibited in recent months, in our view,” says Analyst Elizabeth Suzuki.
Wells Fargo, which carries a price target of $260 as well, called the stock out as a top defensive play among retailers given the rise of inflation and shifting consumer habits. “Taking a step back, the consumer remains resilient, yet with mounting inflation, rising rates and inevitable Hardlines normalization back to Experiences & Travel, positive catalysts for broader retail appear limited as we stand today,” writes analyst Zachery Fadem. “Thus, we believe defensive positioning remains warranted, preferring Autozone, Home Depot, and Tractor Supply Company.
The Technical Outlook: Tractor Supply Rises On Upgrade
Tractor Supply Company gained more than 1.0% in the wake of the Bank of America upgrade bucking the broader market’s decline. The move has price action above what we view as a strong support level and is on track to continue trending higher. The next targets for resistance are at $200 and $210, a break of which could lead to the $220 level or higher. Longer-term, we are in full agreement with the analyst and think this stock will outperform even the high price target of $270.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Tractor Supply (TSCO) | $288.53 | -0.1% | 1.52% | 28.07 | Hold | $282.82 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
