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!
Comments
JamesRemo
⋅
What a gift!! Shares down 3.5% after-hours!! Buy Buy Buy. I just bought several hundred. Adding on the way down.
Tech_time
⋅
Cup and handle forming here imo. Bulls intact.
Tech_time
⋅
Well I hope everyone averaged down. CC was good, revenue beat, eps in-line, and guidance looks good. Long term outlook remains strong and comps were decent as well. Competition appears not to be offsetting sales, but actually inflation instead!
Anyways, shares are up 11% after-hours, and I highly recommend not selling. There will be volatility so be prepared.
Tech_time
⋅
Adding more here, in addition to my initial investment, at $29.89
Tech_time
⋅
Hi everyone. Been pretty busy as of late, increased my TFM position again today. Perhaps the market will break lower and I can finally get it below $30. But at that point it's almost turning into a steal. We'll see. Currently sitting on support.
Tech_time
⋅
Hope you guys are buying at these levels, especially below $32. Don't go 100% but it's very safe here.
Tech_time
⋅
Hope you guys have thick skin. But this is a joke of a downgrade in my honest opinion.
Bought 150k at $31.50
Tech_time
⋅
Added the rest of my previous position at $33.50
If it goes below $33/32 then I will start growing my total exposure over my initial.
Tech_time
⋅
Yeah great price swing, I guess it was some fund dumping. That's the beauty of trading around a core position...you can have the mentality of both a "flick switch" trader and a patient investor.
The break above $37.10 was a head-fake, I knew the prints were messy up there lol. Anyways, adding some back on at $34.50 in after-hours but hopefully it heads lower. I'm still looking for larger net exposure.
Tech_time
⋅
If anyone is still interested I will continue to make the buy and sell calls for trading the daily. But tell me, otherwise I no longer am.