AGCO

Is a Stock Market Crash Coming? — Coronavirus Update and P/E Ratios

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Image Source: World Health Organization, Coronavirus disease 2019 (COVID-19), Situation Report — 32 We don’t think this is the environment to put new capital to work, and we remain highly cautious of what COVID-19 means for global economic growth not just in the first quarter of 2020 but for the rest of this year (maybe longer). Right now, the US markets are not really factoring in anything related to COVID-19, and perhaps may be adjusting to China’s stimulus in artificially propping up the markets as if the outbreak is somehow a “positive thing.” With the S&P 500 trading at 19.0 forward earnings estimates–estimates that are likely too high given the evidence we are seeing with respect to a slowdown due … Read more

Resetting Your Mental Model

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Image Source: affen ajlfe A version of this article was originally published on our website October 6, 2013. Having the right mental model and using the right information can be the reason why you win or lose in investing. “What is the definition of timeliness? Many believe it is getting information to investors as quickly as possible after an event, or updating something every single day or week for immaterial information. I believe in a different definition of timeliness. I believe timeliness is using all information available in a mosaic approach to accurately predict the event before it even happens. Take Kinder Morgan as the latest example. We were the only ones predicting what was going to happen before it did. To investors, … Read more

Our Reports on Stocks in the Agricultural Equipment Industry

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Structure of the Agricultural Machinery Industry The agricultural machinery industry is composed of firms that make farm and construction equipment. Demand for agricultural equipment is levered to farm incomes and commodity prices, while purchases of construction equipment are dependent on global economic health. Population growth and the increasing need for food/energy are the major long-term drivers for new orders across the industry. Still, firms are competitive, capital intensive, and possess significant operating leverage. A strong/dependable brand and an expansive distribution network are keys to success. We’re neutral on the group. We’ve optimized our industrials coverage. Our reports can be found here.

Caterpillar Misses Estimates and Revises Guidance Downwards

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Image Source: Caterpillar Inc – Third quarter 2019 IR presentation By Callum Turcan On October 23, Caterpillar Inc (CAT) posted third-quarter 2019 earnings with both its top- and bottom-line performance falling well short of consensus expectations. Furthermore, management revised the firm’s adjusted (non-GAAP) EPS guidance for 2019 down to $10.90-$11.40 from $12.06-$13.06 previously, quite the reduction. Please note this represents Caterpillar’s second earnings guidance reduction so far this year. Caterpillar’s weak performance is about much more than just the industrial equipment supplier, it speaks unfavorably to the state of the global industrial economy. Our fair value estimate for Caterpillar stands at $156 per share, and shares of CAT yield 2.9% as of this writing. Revenue Growth Disappearing Management has adjusted … Read more

Trump “Tweet Storm” Reveals Increased Frustration with Fed, China

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— Markets are starting to look toppy. — By Brian Nelson, CFA — The markets are under heavy pressure Friday, August 23, as China escalated the trade war with new retaliatory tariffs on $75 billion worth of U.S. goods (soybeans and autos), including a 5% tariff on U.S. crude oil prices. Removing the Energy Select Sector SPDR (XLE) from the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio August 14 looks to have been a savvy move. Following the much-anticipated speech from Fed Chairman Powell today, President Trump responded with a series of tweets that showed tremendous frustration with the current situation. Here is the Twitter thread, reproduced below: — As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or … Read more

A Tale of Two Big Agricultural Industries: Protein Producers Win and Farm Equipment Manufacturers Lose After Recent USDA Report

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Image Shown: The tale of two big agricultural companies in one chart, with shares of poultry producer Sanderson Farms Inc (SAFM) shooting up on Monday, August 12, as chicken feed prices fell after a recent USDA report (which sent corn prices sharply lower) while shares of agricultural equipment manufacturer AGCO Corporation (AGCO) tanked as the market priced in continued pressure on US farm incomes and the dynamic impact that has on demand for farm equipment. By Callum Turcan On August 12, the USDA released a report that stated US farmers had planted more corn than expected at 90 million acres (2.6% higher than consensus estimates) and that forecasted corn yields were also higher than expected at 169.5 bushels an acre … Read more

Caterpillar Crushed by Expectations for No Growth in China

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Image Source: Mining.com Heavy equipment giant Caterpillar saw its share price drop significantly following its fourth quarter report January 28 as it reported disappointing bottom-line results for the quarter and announced expectations for softness in China. By Kris Rosemann Concerns regarding macroeconomic uncertainty and the impact of the ongoing trade dispute between the US and China have dominated headlines of late, and these areas, as expressed through notable company outlooks, will remain in focus throughout this earnings season. Caterpillar’s (CAT) fourth quarter report, released January 28, was no exception as its comment on the recent demand environment and forward-looking expectations were closely dissected. The market was significantly disappointed with what it found, particularly as it relates to the company’s operating … Read more

Valuentum Stock Screeners

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This article was sent to members via email December 29. That email can be accessed at the link that follows this article. By Brian Nelson, CFA Hi everyone, I wanted to provide an update with respect to Valuentum’s stock screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, or data that is important with respect to the investment decision-making process. We publish screens in each of the monthly newsletters, but we also provide a basic weekly screener for download on the left column of the website, “Download Weekly Stock Screener (xls) — login required.”   We also have other products. The more robust DataScreener, for example, is part of the quarterly Financial … Read more

Market Mayhem — Alerts for Members

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During these extremely volatile times, it’s important to stay focused. On December 15, we informed all of our members to “Pay Attention.” Shortly thereafter, we notified members of the potential for a stock market technical breakdown. This morning, we offered a pre-market briefing about the importance of thinking about portfolio protection. For Best Ideas Newsletter and Dividend Growth Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=e2406cd6-c113-4344-8731-493f33fc44a4&id=preview For High Yield Dividend Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=b3ba530f-38b3-489a-ac96-2961dca89c6b&id=preview For Exclusive members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=ba6d90c0-4433-48b2-9b8a-aac4ddf9006e&id=preview We’re here for any questions. Please just let us know how we can help! Kind regards, Brian Nelson, CFA  brian@valuentum.com

Deere Expects Replacement Cycle to Continue Despite Trade Tensions

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Image Source: David Wright Deere & Co’s fiscal 2018 fourth quarter report included expectations for the replacement cycle for farm machinery to continue despite global trade tensions and other geopolitical uncertainty. Its equipment operations have performed well of late as it continues to ride a wave of solid demand. By Kris Rosemann Ag equipment giant Deere & Company (DE) reported fiscal 2018 fourth quarter earnings November 21, and the company continues to take advantage of the replacement cycle for farm machinery amid global trade tensions and other geopolitical uncertainty. New and innovative products are also helping drive its top line, according to management, and net sales advanced 18% in the fiscal fourth quarter on a year-over-year basis. Equipment net sales … Read more