Tractor Supply has benefited from the strength in agriculture, and yesterday (Tuesday) it got a helping hand from Barclays Capital.
Barclays raised its price target to $78 from $70 without increasing its earnings or revenue estimates, wagering that investors will pay more for Tractor Supply's growth story and market position in one of the strongest segments of the U.S. economy. Barclays also predicted that interest in the stock will grow as TSCO's market capitalization approaches $5 billion.
OptionMonster's tracking systems lit up early with buying in the July 70 calls as shares pushed into record territory. Those contracts fetched $0.70 early in the morning and continued to appreciate along with the stock price, closing at the high of $2.85.
TSCO stock ended yesterday with a 5.45 percent gain to $71.53 and is up 20 percent in the last month. (See ticker for today's quotes.) The company sells a wide range of agricultural products including machinery, fencing, and animal feed. It earnings and revenue beat forecasts the last time earnings were released on April 20, and management raised guidance.
Yesterday's breakout and analyst comments suggest that the company is becoming a more mainstream name, so it could become more popular among option traders going forward.
More than 5,000 contracts changed hands yesterday, more than 12 times average for Tractor Supply.
Russell has no positions in TSCO.
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David Russell is a reporter and writer for OptionMonster.