A blog meant to share and track my analysis and investment decisions openly and for my own historic tracking. I'm just an average guy with a real job and this is something I do for fun and knowledge growth.
Stock Analysis: John Deere (DE)
Stock Ratings: 1 = buy at current stock prices, 2 = buy on a 5-10% dip in stock price, 3 = sell on a 5-10% increase in stock price, 4 = sell at current stock prices to raise cash
On Wednesday, John Deere and company announced their Q1 2014 earning results. In short, the results for the past quarter were spectacular. They provided a thirty cent beat on $1.51. Earnings were $7.65 billion where estimates were at $6.8 billion. Considering the first quarter tends to be a bit weaker, these are strong results for the company. As usual, though, the company provided rather down-trodden outlooks for 2014, but if there was anything positive to take from it, it would be the fact that the expectations aren't any worse than they were a quarter ago. It's true, grain prices aren't as high as they once were - corn in particular. But livestock prices are near all-time highs as well. This smells a lot like a UPOD (under promise, over deliver) situation and the stock price actually has managed to stay steady since the announcement. The stock price now sits near the 200 day moving average and I believe this will provide a strong floor. It will take significant macro worries to really take this stock down any further. My downside limit of $82 still holds. I do anticipate this stock will reach $95 again this year. As such, I rank this stock a 1. I did not make any trades on this stock as it broke through $90. Had I done so, I'd be buying the shares right back right about now. This stock is still 11.4% of my portfolio and as such, I do not plan to add to more of this stock under its current structure. Looking into the next quarter, I anticipate there will be an announcement of a dividend increase at the annual stock holders meeting or in March. The second quarter is anticipated to be the toughest quarter in 2014 by the Deere board. If they meet/beat expectations when we talk again in May, I anticipate the overall year numbers will be adjusted/increased.