TFM is classified as a growth company that has consistently expanded revenues YoY with no signs of slowing down. Comps remain positive. If the company continues to grow at the current rate, they should trade at 30-40x. They are valued less than 20x expected earnings right now - fair value should be within the range of $45-50. And $50+ in an optimistic scenario.
A comparative example would be Whole Foods (WFM), they have limited growth yet trade at 30x and 25x expected; much higher than TFM. Overall I think downside risk is limited from here since poor weather conditions have been baked into the last two quarters (causing a severe sell-off). Although the broader market could generate additional volatility, making shares even cheaper.
The only reason I am not creating a massive position is because the technical outlook remains relatively weak. Moving averages and candlestick formations are bearish. However with a margin of safety larger than 25% it looks attractive. Not to mention that institutional ownership is high (a positive factor).
If it continues to fall I will add to my position of 100k in increments of 4% or so (about $31.25 would be my next average down price).
IN THE CHART: the blue circles represent a major price discrepancy. If the next few quarters beat expectations, the share price will easily rise to levels seen a several months ago. I am currently buying shares at $32.55-32.60 (2:53 pm), you can join me if you'd like :)
Thanks for reading. Share your thoughts and comments!
A comparative example would be Whole Foods (WFM), they have limited growth yet trade at 30x and 25x expected; much higher than TFM. Overall I think downside risk is limited from here since poor weather conditions have been baked into the last two quarters (causing a severe sell-off). Although the broader market could generate additional volatility, making shares even cheaper.
The only reason I am not creating a massive position is because the technical outlook remains relatively weak. Moving averages and candlestick formations are bearish. However with a margin of safety larger than 25% it looks attractive. Not to mention that institutional ownership is high (a positive factor).
If it continues to fall I will add to my position of 100k in increments of 4% or so (about $31.25 would be my next average down price).
IN THE CHART: the blue circles represent a major price discrepancy. If the next few quarters beat expectations, the share price will easily rise to levels seen a several months ago. I am currently buying shares at $32.55-32.60 (2:53 pm), you can join me if you'd like :)
Thanks for reading. Share your thoughts and comments!