Deere & Co. (DE)

(Top Pick Sep 24/14, Down 9.89%) He liked the agricultural prices being depressed and you would get an uptick when they turned around. Then the Agriculture business got more depressed. He has to make some decisions about whether to keep it or not. It is much better run than CAT-N.

It is rather exciting because you might think the whole farm machinery business is a growth business. There are very real cycles on replacement of farm equipment that does not correlate to the wealth of farmers. He thinks we have a couple of years before the next replacement cycle.

It has crashed since they had negative guidance for 2015 and 16. He would wait for the growth outlook to stabilize before buying.

(A Top Pick Aug 14/14. Up 9.7%.) The crop prices were down and people were not buying farm equipment, which pushed the stock down. Also, the forestry side was doing poorly. He felt they were going to be able to fix the forestry side, which they did. A good company and the agricultural side will do well over the next couple of years. Still a Buy.

(Top Pick, July 4 2014, recommended at 91.38 now 94.96, up 6.75 %) Inexpensive. Still buying it. Originally bought because of restructuring of company, still thinks it's good.

(Top Pick May 29/14, Up 5.48%) He was expecting 10%. They had great numbers last quarter. The farming side of the business has slowed down. If this ticks up they should do very well. We can buy the stock cheap at these levels.

(A Top Pick April 29/14. Down 2.48%.) Still likes the stock. Not trading at a huge multiple, Around 12X earnings. Decent dividend yield. With the crop cycle, this is a time to own it. They not only have the agricultural business, but also have a more industrial business that has turned around and is doing better. Thinks this will do well over the next couple of years. Still a Buy.

(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.