By Roger Nachman
Deere & Co. (DE) is set to report earnings on Wednesday before the bell, and analysts are looking earnings of 94 cents per share on revenues of $6.22 billion.
Shares of Deere have cooled recently, but are still near 52 week highs. This comes after Ben Bernanke announced he was going to do another round of quantitative easing into the market. This ultimately became another $600 billion, and money has flowed into speculation, including commodities, and equities.
Deere is one of the best industrial companies this country has, and farmers will attest to that. On every farm in America, and throughout the world, you are more likely than not going to see a piece of Deere equipment.
It's not expensive at all looking at next year's earnings, at just 14.8 times 2011 earnings. It has a decent yield, at 1.5%.
The last time I wrote about Deere I said that the main thing to look for is what it has to say about North America, and particularly Europe, where it saw weakness last quarter. I also cautioned on a pullback that I was expecting. We got it, and we are correcting a little further here today. I don't expect to see much more in terms of a correction, perhaps 1% or so, before we start to move higher.
At these levels, Deere looks like a solid buy going into earnings and given the bullishness we're seeing in the agricultural space, adding here seems like a smart time to begin initiating a position.
Disclosure: No position