Should You Add Tractor Supply Company (TSCO) to Your Portfolio?

ClearBridge Investments, an investment management company, released its “ClearBridge Multi Cap Growth Strategy” first quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter, the Strategy underperformed its benchmark, the Russell 3000 Growth Index. The Strategy posted gains across five of the seven sectors in which it was invested, on an absolute basis. Overall stock selection detracted from the performance on a relative basis. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Multi Cap Growth Strategy highlighted stocks like Tractor Supply Company (NASDAQ:TSCO), in the first quarter 2024 investor letter. Tractor Supply Company (NASDAQ:TSCO) is a rural lifestyle retailer in the United States. The one-month return of Tractor Supply Company (NASDAQ:TSCO) was -5.86%, and its shares gained 22.14% of their value over the last 52 weeks. On June 25, 2024, Tractor Supply Company (NASDAQ:TSCO) stock closed at $264.56 per share with a market capitalization of $28.522 billion.

ClearBridge Multi Cap Growth Strategy stated the following regarding Tractor Supply Company (NASDAQ:TSCO) in its first quarter 2024 investor letter:

"In consumer sectors, we added Tractor Supply Company (NASDAQ:TSCO) and e.l.f. Beauty. Tractor Supply, in the consumer discretionary sector, is the largest rural lifestyle retailer in the U.S. We believe the company has meaningful scale and distribution advantages giving it a cost-to-serve edge, and notably generates 77% of sales from its 32 million loyalty members. Despite being the biggest retailer of its kind, Tractor Supply has only high single-digit market share of its large and growing addressable market, estimated to be approximately $180 billion. We see opportunities for Tractor Supply to resume its strong earnings trajectory as growth related to post-pandemic normalization nears a bottom. Operating margins have been flat for the past few years, but with investments peaking, margins should start to lever again with same store sales growth."

An equestrian rider proudly leading a horse around a competition course.

Tractor Supply Company (NASDAQ:TSCO) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Tractor Supply Company (NASDAQ:TSCO) at the end of the first quarter which was 30 in the previous quarter. In the first quarter, Tractor Supply Company (NASDAQ:TSCO) delivered a 2.9% growth in net sales, with comparable store sales up by 1.1%, and diluted earnings per share by 10.9% to $1.83. While we acknowledge the potential of Tractor Supply Company (NASDAQ:TSCO) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Tractor Supply Company (NASDAQ:TSCO) in another article and shared the list of best home improvement stocks to buy. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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