I have been watching TSCO for quite a few months now and remember the stores from my growing up in the mid-west. the price passed thru my ‘buy target’, so i took another look through my ‘relative growth’ model tool that looks at future capital and dividends with a blend of historical and forecasted numbers. two reasons i just cannot pull trigger … first, the dividend yield 3 years out remains below 3.5% which is my favorable 3 year floor. second, even though the capital appreciation on the low side should be somewhere close to 9% annual appreciation, i fail to see how rural america and small town america which is the heart of TSCO customer base will stay even with where it is now … a cyclical decline based on a) international competition for commodities, b) demographics behind the aging populations, and c) the further exodus to urban centers for jobs, education and promise
i took the target down $2 from today’s close to $59, and i am still frozen on same two rationale. there has to be some new sign of growth in the customer base and the business before i can pull the trigger … more waiting, though TSCO now moves from a radar slot #4 to a #6 (just watching).
If you want a blank Google Sheet w/ the relative growth model, email me @ email@example.com