Friday, August 22, 2014

Trade: John Deere & Company (DE)

Notes:
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.  Ratings are based upon 12-18 month outlook on stock direction and not necessarily related to moves I make due to financial positioning.

As stated in my summary last week, I ranked Deere a 4, meaning I was looking to get out.  Unfortunately, I overstayed my welcome - not selling yesterday when the stock hit $86 as I was intending to do.  Today it got a downgrade and announced more layoffs and as such, I sold my entire lot at $84.85.  While odds are good that I panicked some, I feel this was the right choice to reduce my stock exposure (I'm have too many holdings right now) as well as protect myself from losing money.  I did capture some meager gains, but clearly I left the majority on the table as I should've sold off a couple months ago in the 90s.  This is what you would call the best stock in a bad neighborhood.  Ag stocks aren't doing well and even the best is losing on revenues.  I believe we need to wait until we see signs that the market and/or company is turning things around before we get back in.  I believe this will result in flat to down price action on the stock for at least 6-12 months as this year's crops will be strong and there are no foreseeable events at this time that will cause demand to force prices to increase in commodities.