Ben Cheng Agco Corporation AGCO-N DON'T BUY Nov 12, 2004

Great footprint in Latin America. Well-positioned and has great free cash flow. Accumulating market share away from John Deere and others.

Yesterday, they reported a strong earnings beat and beat sales, but they also reiterated their full-year forecast instead of raising it. 2023 could be another good year.

Farm equipment manufacturer. Smaller competitor to DE, which he also owns. Trades around 9x next year's expected earnings. Reasonable debt. Expanding footprint. 58% of revenue comes from Europe, and this has weighed on stock, but it will pass. Farm prices are rising. Tech-enhanced equipment increases crop yields. Yield is 0.81%.

Yesterday, they announced a 2025 forecast that was a tad short, but crop prices are in good shape, which encourages farmers to buy farming equipment. Shares are down 20% this year.

Agriculture has been struggling from geopolitical worries, low prices for key crops and high interest rates. They reported a revenue miss and earnings miss this month, but trimmed costs with a mixed forecast.