Brian Madden, chief investment officer at First Avenue Investment Counsel, discusses his top picks: Tractor Supply Co, Franco-Nevada Corp, and Brookfield Asset Management Inc.Tractor Supply is a ubiquitous presence in rural America, operating over 2,000 farm supply and rural lifestyle stores across 49 states. Its core customer in many cases is a farmer, horse owner, rancher, hobby farmer or simply an exurban or rural homeowner.
The stores sell pet and livestock supplies, hardware, tools and truck supplies; as well as toys, apparel, seasonal merchandise and maintenance products for agriculture. Tractor Supply targets between six and seven per cent annual sales growth, with between four and five per cent same-store sales growth supplemented by new store openings.
The company has grown dividends at a 25 per cent compound rate over the past decade and currently sports a yield of just under two per cent. The company has a strong and sustainable competitive advantage as a differentiated, experiential retailer operating in less contested regions and categories and accordingly has performed well during tough economic times, with the shares outperforming market indices in five of the last six major bear market cycles.
Brookfield’s size and scale allow it to field expert teams with deep operating experience across industry verticals and geographic areas. Moreover, its financial strength and variety of funding sources afford it the advantage of being among the first calls that sellers of world-class assets make when looking to consummate a transaction.
I love how Brian looks directly into the camera and speaks to the audience. He's just so damn comfortable in the studio. Or, he's faking it. One or the other.
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