Deere & Co. (DE)

(A Top Pick March 26/14. Up 4.94%.) He likes the story. Thinks the agricultural/commodities have been down which has hurt them. He is very comfortable with this, and you are not paying a lot of money for the good dividend.

Their main business is agriculture, but some services mining. They are dependent on farmers’ income. He does not see a lot of strength in grain prices. Last year was a bumper year, but he does not think it will be again this year.

Chart shows that this is close to a breakout right now and would be hitting $92. It really picked up in October and has been performing quite well. This company is in its seasonal period right now, so if the market continues to go up a little bit at this point, you could actually see the company break above its current level and it would be a good buy. The seasonal period ends in mid April.

Positive on this one in the future. The sector is very stable and this company makes quality products. Their biggest risk is where their growth occurs. This is just a question of the cycle, the automation and the technology. As food and farming operations goes, you should see this company go along with that and produce good results. He is not as constructive on agriculture right now.

The stock is cheap. They went into construction and it does well when agriculture does not. People are afraid farmers won’t buy farm equipment.

(Market Call Minute) There is not the demand in agriculture for new equipment. Peak earnings were in 2013 and they will be negative in the next few years.

The agricultural business was weak because crop prices were down. He likes their construction/forestry business which he felt was under performing, but had actually outperformed in the quarter. You are not paying a lot for this. It may go a little bit lower from here, but he would be a buyer. Trading at about 11X earnings and pays a 2.83% dividend. Remember that the crop business is cyclical and if it turns around you will see an uptick in their product. Have reduced the number of people who sell their product, which has helped.

Thinks you are heading into another earnings cycle positive for this company, so he expects earnings growth to continue globally. However, he finds valuations a little bit rich, and if he owned he would probably be trimming some of his position.

Feels they are really going to benefit from a growing economy, especially on the crop production side. Consumption is growing globally. Not expensive. Trading at 12X earnings. Nice dividend yield of 2.6%. Has a good construction side that is growing.

(Market Call Minute.) This has no FMV to work with. Trading right on pretty good technical support right now, but that’s about the best he can say. Forecast earnings are flat.

(A Top Pick May8/13. Up 1.09%.) Sold his holdings. This is a long-term secular positive story, but within that cyclically, the replacement cycle has come and gone.

Feels the agriculture business will continue to grow and do well. Isn’t trading at a huge multiple and has a nice dividend. The other key is the construction business and if they can get this going properly, that will be 2 things working really well for the company. These types of companies do well when the global economy starts to pick up. 2.6% dividend.

Deere (DE-N) or Caterpillar (CAT-N) for at least a 5 year hold? His instincts are saying this company because it is in the food area. Certainly with the growth of agriculture, in terms of acres planted, that will be helpful to this company. At the current time, he wouldn’t touch this because farmers’ incomes are scheduled to drop next year and possibly the year after.

Just released earnings and beat expectations, but outlook caused some sell off. This is not the strong time of year for Deere. We have been turned back from the resistance level.

Thinks things will pick up in the agricultural sector. 12 or 13 times earnings. Almost 2.2% yield. There will be some better performance in this area down the road as well on their industrial side. It is not an expensive stock and if we see the growth he predicts you will do well.