The Rising Influence of Rising Affluence

[DewDiligence]

DE’s construction business (28% of FY2Q18 product sales, +84%! YoY) has clearly bottomed and is now booming. The outlook for DE’s ag business (72% of FY2Q18 product sales, +22% YoY) is less clear insofar as it depends on such variables as weather and tariffs; DE lowered FY2018 sales guidance slightly for the ag segment to +14% YoY (from prior +15% YoY).

Companies such as DE and CAT have clearly managed cyclicality in the current business cycle much better than in past cycles.

I'm not a buyer of DE at the current valuation, but I'm not selling either (due to the very low tax basis of my shares).

FY2Q18 PR:
https://finance.yahoo.com/news/deere-reports-second-quarter-net-103000941.html