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Companies are actually spending money, it's just not on payrolls, writes Minyanville's Steve...

Companies are actually spending money, it's just not on payrolls, writes Minyanville's Steve Smith. Investment in equipment and software has soared 26% since the end of the recession, while the jobless rate has barely budged. Standing ready to profit from the trend are large-cap global manufacturers: John Deere (DE), Caterpillar (CAT), Cummins (CMI), Joy Global (JOYG).
Comments (3)
  • Joe Eifrid
    , contributor
    Comments (339) | Send Message
     
    Equipment and software may have surged but how much is due to Section 179? Have we again pulled sales forward?

     

    >>Section 179 for 2011 at a glance:
    2011 Deduction Limit - $500,000 (up from $250k previously). Good on new and used equipment, including new software.
    2011 Limit on equipment purchases - $2 Million Dollars (up from $800k previously).
    “Bonus” Depreciation - 100% (taken after the $500k deduction limit is reached). Note, bonus depreciation is only for new equipment. This can also be taken by businesses that exceed $2 million in capital equipment purchases.<<

     

    Due to the extension of Section 179 under the 'HIRE Act of 2010' - the enhanced limits under the 'Jobs Act of 2010' - and the recently enacted 100% Bonus Depreciation under the 'Tax Relief Act of 2010' - you can basically write-off 100% of all the equipment and software your business needs to buy or finance this year. This ends this year unless extended.
    1 Jul 2011, 05:13 PM Reply Like
  • Peregrinus
    , contributor
    Comments (124) | Send Message
     
    DE, CAT, CMI and JOYG are may favorite stocks! I favor CMI and JOYG more because of their large option premiums (implied volatility).
    2 Jul 2011, 10:50 PM Reply Like
  • LuckyPick
    , contributor
    Comments (740) | Send Message
     
    Deere CEO was clearly bullish on his company, article below (DE)
    www.bloomberg.com/news...
    7 Jul 2011, 08:51 AM Reply Like
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