Tractor Supply Co. (NASDAQ:TSCO) is a chain of more than 1,500 stores that sell equipment, tools, feed, and clothing to a largely rural customer base of farmers and ranchers. The company’s shares declined after it reported weak results, partly influenced by depressed farm incomes due to unusually low crop prices and some stores’ exposure to deflated energy-related markets. Although we reduced our position, we believe these factors will prove largely transitory. We believe Tractor Supply offers the potential for ongoing earnings growth based on its ability to meaningfully expand its store base, while also growing its assortment of higher-margin private label goods and increasing its sales mix of consumable goods.
From Baron Funds' Barron Asset Fund third-quarter 2016 commentary.
