How To Profit From A Boom In Rural America

About a month ago, I told you about a little weekend fishing expedition I took with my father-in-law.

Living in Idaho, we’re blessed to have a lot of nature in our backyard. So a fishing trip is a regular occasion. But I was shocked to see the store shelves empty when we stopped by to stock up on some gear.

It just so happens this is a regular thing across the country. As I pointed out in that article, the retail numbers for May were indeed shocking. But it also got me thinking about the “winners” and “losers” during this coronavirus outbreak – and over the long-term.

This summer, we’re seeing major catalysts for things like home improvement, outdoor recreation, and camping. These activities get you and your family out of the house, yet you remain away from other people…

And from a broader perspective, you need to be thinking about what long-term trends could be left in the wake of the coronavirus outbreak. For example, businesses will likely continue to shift towards a work from home model … That means folks don’t have to be concentrated in highly populated cities and can focus on making the move to a more rural lifestyle, where they can enjoy the outdoors and grow their own food.

This Retailer Is Thriving In The Covid-19 Era

One stock I’m intrigued by right now is Tractor Supply (Nasdaq: TSCO).

Founded in 1938 as a small catalog company, it is now the largest operator of retail farm and ranch stores in the United States. It boasts more than 1,860 store locations across 49 states. The company also owns and operates 180 Petsense stores in 26 states. Petsense is a small-box pet-specialty retailer.

Tractor Supply primarily caters to the growing population of recreational farmers and ranchers, providing everything from chicken coops to power generators to welders to tools to sporting goods to clothing to outdoor living to gardening.

It’s benefited heavily from the “farm to table” food movement, which fosters local food production. Farm-to-table is one of the top restaurant trends, as well as a favorite among those who cook food at home.

More than 42,000 U.S. schools across 40 states participate in farm-to-school programs, sourcing cafeteria and snack foods from local producers. And according to the U.S. Department of Agriculture, there are now more than 8,700 farmer’s markets across the country. It’s here you’ll find one of the country’s 200,000 recreational beekeepers selling local honey and you’ll find eggs from a growing number of backyard chicken coops.

In 2019, the company generated sales of $8.4 billion — a 5.6% year-over-year growth — and more than half a billion in profit. For the year it grew cash flow 17% to $812 million.

When the company reported first-quarter earnings at the end of April, sales grew 7.5% to nearly $2 billion, and same-store sales increased by 4.3%. Operating cash flow jumped to nearly $84 million, a stark improvement over the $13 million loss it posted in the same quarter a year ago.

TSCO chart

Action To Take

As you can see in the chart above, the stock has been on an epic run since the coronavirus selloff. We added the stock to our Maximum Profit portfolio not too long ago, and are currently up about 10%. But thanks to our system, we’ll use tight stop-losses to get out of the trade if the stock takes a breather or retreats from this level. Until then, we’ll enjoy this rally.

If you’re not a follower of our system, I’d suggest treating TSCO as a trade right now. But it could still pay off in the long-run.

Tractor Supply should continue to see tailwinds in the wake of the coronavirus outbreak. The impact will be clearer when the company reports second-quarter earnings. If sales and earnings come in lower than expected that will likely hurt the share price. But I don’t see that happening.

Not only is it pretty much business-as-usual in rural America, you could see more people embrace that lifestyle in the months and years ahead.

P.S. I recently spotted another potential big-time winner buried deep in the SEC filings of a little-known satellite technology company…

It turns out this company paid a measly $26 million for a tech startup it bought in 2019. That’s an amazing price, but it’s just a small fraction of what they received for their $26 million.

Because buried deep in those dense legal contracts was a critically important footnote all the obnoxious Wall Street analysts missed. And the implications are huge…

Chances to beat Wall Street insiders don’t come along every day. So, it’s critical you jump on this one immediately. Go here to learn more…