Replies to post #23607 on The Rising Influence of Rising Affluence

[DewDiligence]

DE—During the CC Q&A, the CFO highlighted how the increased software component in tractor-and-combine sales is increasing the operating margin, a theme presented in #msg-161353722. Still, I’m not fully on-board with the notion (expounded in that post) that DE ought to be characterized as a network software company.

The stock is now +11% today to a new all-time high. Despite the bullish outlook for FY2021*, the stock’s enterprise value of ~$140B (including ~$40B of net debt) seems stretched. (I’m not selling any shares because my cost-basis is too low to take the tax hit.)

*Fiscal year ending 10/31/21.

[DewDiligence]

Addendum_(bullish for CLF)—DE expects a $500M YoY increase in materials costs—mainly steel—during FY2021.

[DewDiligence]

DE—Slide #16* depicts the GHG reduction from DE’s road-paving equipment that recycles old bitumen in situ.

*https://s22.q4cdn.com/253594569/files/doc_financials/2021/q1/1Q_2021_Earnings-Call-Presentation.pdf

[DewDiligence]

DE raises_FY2021_guidance_AGAIN—expects_profit_of_$5.3-5.7B—(up_from $4.6-5.0B_three_months_ago and $3.6-$4.0B guidance six months ago!):

https://finance.yahoo.com/news/deere-raises-forecast-profit-more-102753191.html

For related info, please see #msg-161984736 and #msg-161353722 (which are themselves related).

Despite a recent dip, DE is +33% in calendar 2021 and has nearly tripled from its 12-month low.

In the portfolios I manage that contain DE, the position is up more than 1200% (not including dividends) since inception 12 years ago.

DE’s own FY2Q21 PR:
https://s22.q4cdn.com/253594569/files/doc_financials/2021/q2/2Q_2021_News-Release-and-Financials.pdf

CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2021/q2/2Q_2021_Earnings-Call-Presentation.pdf