In the past, we've explained some of the fundamental tenets of the classic growth investment philosophy that we follow at Taylor Frigon Capital Management. To revisit those, see "The Classic Growth Stock Investment Philosophy" or the series entitled "Beautiful Growth Companies" (this is a link to part I, and below that post are links to parts II and III).
Recently, we described some aspects of our investment thesis for a company that is a classic Taylor Frigon growth company, in order to provide some idea of how that theory translates into actual investment holdings, as well as to encourage investors to focus on the kind of good businesses which can be found in almost any economic environment -- a focus that is very easy to lose amidst the noise of the financial media and the geopolitical events that crowd the news each day.
We also selected a growth company that is outside of the "tech sector," to illustrate that (although we believe there are excellent growth opportunities related to technology right now) there are growth companies in many sectors that investors might not think about when they hear the phrase "growth stock."
Here is another one, which we have owned for clients in our portfolios since 2004, a company called Tractor Supply*. Tractor Supply Stores are located in rural communities in the continental United States, and their stores serve a niche that other retailers do not address. The company started out serving the needs of farmers and ranchers, but their merchandise includes a wide variety of goods difficult to find under a single roof anywhere else, and includes pet supplies, well pumps, generators, other power tools, tack and feed, welding equipment, lawn and garden products, and men's and women's workwear. Each Tractor Supply Store has on staff a welder, a horse owner, and a farmer.
The company has over 800 stores in 40 states, which may sound as though they have the nation pretty well covered, but the map below illustrates that there are still plenty of markets where Tractor Supply can continue to grow, and where customers would likely be very happy to see them (to see a more detailed list of their store locations, click here for a link to the company's store list by state).
The stock performance since we began investing in the company (in September 2004, at the very left end of the chart below) has been a bit erratic, and reflect fears in 2008 and 2009 that the US consumer was going to fall off a cliff, never to return (at least not for the foreseeable future). However, the company's growth has been strong and the holding is illustrative of the point we have made about investing through cycles when the growth story of a business remains intact.
In its most recent quarterly earnings, the company beat analysts' expectations in both revenues and earnings, growing its earnings by 55% over the year-ago quarter.
* The principals of Taylor Frigon Capital Management own securities issued by Tractor Supply Company (TSCO).
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For later posts on the same subject, see also:
- "Have you heard of this company? DLB" 03/05/2010.
- "Have you heard of this company? HITT" 07/06/2010.
- "Have you heard of this company? IIVI" 08/05/2010.
- "Have you heard of this company? CHRW" 09/20/2010.
- "Have you heard of this company? NAT" 11/22/2010.
- "Have you heard of this company? EZCH" 12/09/2010.
