Jim:
Welcome to "Invest
In America"... a
look at companies
that make this
country great...
those that are
poised to take
advantage of this
new economy, and get
us through these
tough times. With
the polls all
indicating that
Barack Obama will be
the next president
of the United
States, that tells
me that the biggest
winners tomorrow
won't be the
democrats... they'll
be the agricultural
stocks... as Obama
has wholeheartedly
embraced our very
expensive ethanol
policy. Not that I
blame the guy...
that's just how you
win the Iowa
caucuses and,
ultimately, get to
the White House.
Obama could be the
most pro-ethanol
president in
history, when you
consider his roots
in Illinois, another
big farm state. So,
an Obama victory is
also a
Deere & Co. (DE*)
victory because, if
we're using ethanol
as oil, then Deere
is the
Schlumberger (SLB)
or the
Halliburton (HAL)
of the ethanol
industry.
See all
of
tonight's
stocks
mentioned
on
Yahoo!
Finance,
here...
Monday,
November 3, 2008
(Cont'd from
above)...
Now, Deere, along
with the rest of the
cohort, has taken a
gigantic hit...
thanks to the major
declines of the
prices of
agricultural
commodities, and the
global economic
slowdown. The
stock's off 59% from
a 52-week high. It
could be poised for
a comeback though,
especially with a
President Obama...
Even without a boost
from the White
House, things are
looking better for
Deere... It reports
on November 16th.
September retail
sales look good...
Deere outperforming
the North American
agriculture equiment
market. The company
saw double-digit
growth in four-wheel
drive tractors...
Its Western European
markets saw
double-digit growth.
Deere also
outperformed the
Brazilian market,
with triple-digit
growth in tractors
and combines.
Deere's construction
and forestry
commercial and
consumer sales all
grew by double
digits. The trouble
with Deere seems
less to do with
equipment, and more
to do with the
credit business, as
Deere extends credit
to help its
customers buy
equipment...
Deere finances about
half of its
agriculture
equipment sales, 75%
of construction and
forestry, and half
of its commercial
and consumer sales.
The fear on the
Street is that the
credit crunch could
give Deere the same
problems that the
autos are suffering
from.
I think the fear is
overblown, and that
Deere will thrive,
if Obama wins
tomorrow.
This is a stock I
like, especially if
it goes below $37,
where it will have a
very safe, very
accidental 3%
yield...
Frankly, I don't
care about this next
quarter... not at
all. I care about
the long-term thesis
of farming, and how
it might be a
multi-year growth
business.
But, to get a better
idea of how the
whole ag complex is
working, I want to
talk to Bob Lane,
Deere's terrific
chairman, president
and CEO. Mr. Lane,
welcome back to Mad
Money...
JIm's comments AFTER
the interview:
Alright... you have
to understand that
there is a
difference between
short and long term
traiding and
investing. This
market's become
dominated by
traders. I
understand that...
If you step back...
You heard what Mr.
Lane said... we're
talking about a
dominant company for
multi years to come.
You can trade this
off of every tick of
oil if you want to,
but how about
trading it off of a
long-term thesis of
the growth of a
worldwide economy,
and the idea that
people... once
they've tasted
grains, and tasted
the meat, and tasted
chicken that come
from grains... they
don't go back.
That's why I think Deere & Co. (DE*)
is a terrific
opportunity, and I
think you've got to
stay in it, and get
long it, to take
advantage of this
decline.
