Deere & Company (NYSE:DE)

Reloading on the dip.

Developing nations will need to modernize their agricultural toys.

watch this stock until it hits bottom and starts back up, it won't be very long so don't blink. get a feel for deere and you can make money on this stock for several years.

love the ags esp. those who provide the pics and shovels.

Even though the stock has had a good run recently (which means I usually wouldn't buy it late to the party), I think its fundamentals are still really good. P/E lower than the industry average. This is a capital investment play.

Good to go!

world wide construction and ag.

Food prices up--farmer's in the market for Deere products usually have been at it for a while and know what they are doing, they can keep costs down via subsidy and commodity trading (if they are real sharp) and with the consolidation of the family farm into HUGE CORP FARMS the equipment is key and must run and be dependable. Also, farmers dont want to pay taxes on these profits so they buy machinery when profits are up--sounds simple I know but hey--it is farming after all. They are growing row crops in record numbers, their land is increasing in value--land=collateral= low interest rates (if they aren't low enough) Good resale value--banks will loan $ on them no problem--most farmers know and have good relationship w/bankers, ie small town syndrome. All adds up to FARMER BROWN gonna pay taxes or ramp up expenses for short term decrease in net profits that are going to be huge across the board. NOT TO MENTION THE INEVITABLE HUGE INCREASE IN OVERSEAS sales as smaller countries fighting import pricing begin to attempt self sustaining ag programs etc... GO BIG GREEN!

While the farm industry is certainly affected by the high fuel prices, With the approval of the 2007/2008 farm bill i would expect to see this company increase it's sales in order to aid with the ever growing ethanol / biodiesel market.

Considerable international growth yet to come despite recent earnings setback. Strong ag play.

With today's haircut and long-term bullish trends in agriculture, DE is a buy.

Investing in other sources of energy and also picking up tracition overseas

I think this is a great company, and I want them to do well. However, I know a lot of farmers out there who are not buying new equipment. I see a lot of construction companies buying Volvo, and your average consumer isn't buying anybody at the moment. It simply comes down to how much is in the pocketbook right now.

And a lot more farmers are renting their equipment through co-ops so don't go thinking that because there are farms they have a tractor.

The Company operates in 4 segments: agricultural equipment segment, commercial and consumer equipment segment, construction and forestry segment, and credit segment

Finally, we have an opportunity to buy Deere. This stock has rolled through earnings for a time now blowing by estimates. The first quarter was nothing bad, but every stock has to come down sooner or later. Coming from a large agricultural area, there are many things going on with respect to farming. The first thing to remember is that farming is a business, and in this business there are certain things that most likely will happen. The price of corn went up, so farmers planted more corn. This took away from soybean acres and that price followed. Then wheat shot up. First, corn is not just an ethanol story, but a story with respect to food stocks for meat that people are eating in places like China. Historically, when a market starts a meat based diet, they find that it very rarely goes back to a grain based diet. The ethanol story did help but it was a combination of the two. Before the boom in pricing, corn was planted but required much more water and fertilizer. For this commodity, it was only cost effective if you had very wet land. If your land was wet, you could rotate your crops between corn and soybeans. If your land is dry, it would be wheat and soybeans. Generally, it is not good to plant wheat and corn on the same land over and over as the soil is unable to replenish itself. With respect to this corn is still much more valuable. Since farmers are growing different types of crops, they also need different types of machinery.

Since farmers are making money hand over fist and still receiving subsidies, they have to put the cash to work. They will generally pay off any additional mortgage on the farm as during the lean years they borrow from their property to make ends meet. They pay this off just in case, things get tough again, and at some point they will. Secondly, they will buy new machines. The reason they go out and buy a $500000 combine, are because they either spend it or pay taxes on it. Newer global positioning systems are also increasing productivity, so it pays as farmers can get more of their crop done in less time. One thing to remember is that these farmers have to increase yield as they have most of their acreage on line. This means more fertilizer and more machines or newer more productive machines.

Recently Deere posted their earnings. With this they saw an increase in profit by 22% year over year. They earned $1.74 per share versus $1.36 last year during the same period. During their call they announced that overseas sales were up 46% while in the United States they were only up 6%. They missed earnings by a penny with reference to Thomson Financial. Deere had an amazing 8% increase with respect to currency translation. The miss wasn’t as concerning for the stock as guidance was as Deere offered up a 20% increase in sales for the next quarter between $550 million and $575 million. Guidance was somewhat conservative, but I expect they will beat this easily.

The majority of their growth was overseas and this will continue. The fact that the company is having trouble keeping parts in stock is bullish going forward. I believe Deere’s upcoming concern with respect to steel prices will initiate price increases of their own and on growing need they will be able to pass this on to their customers. Deere is a value play at this point and I believe you will see those testing new highs before the end of this quarter.

With respect to the chart, DE seems to have a solid bottom placed in at $81.25, but upside is to $90. If it drops below support sell, but I have a feeling it wont.

great buy! Just take into consideration the amount of people that walk this earth, and then try to picture the amount of food it take to keep the people of this world alive. With that in mind, John Deer is one of the largest suppliers to farmers. Also John Deer supplies forestry equipment, and thats never going away. In addition to those types of equipment they also supply the following: residential, commercial, golf and construction equipment. So if you look at all of those things you will realize that our country uses them every day and there more than likely not going anywhere. Happy investing and good luck (tho you wont need it).

Outperformer

Has risen sharply in the last couple of years and cannot be sustained as the recession looms and with the market of scarcity, Industrial and non-industrial farms are going to put off upgrading new equipment. DE will have to increase their prices due to an increase in raw material and will have to suppress their current margins in order to attract consumers.

Sharp Drop Today, Capitulation