DE logged the best-ever fiscal third quarter in the company’s history in both sales and earnings, but the share price fell because investors and analysts think lower corn prices mean the good times can’t continue (#msg-90897108). I think these analysts and investors are missing the big picture, namely the tailwind from increasing global consumption of food (and especially protein). Moreover, these analysts and investors are failing to grasp that lower corn prices go hand in hand with higher production, so that overall cash receipts by farmers will remain at very high levels in the 2013-2014 growing season.
DE raised its GAAP EPS guidance for FY2013 (ending 10/31/13) to $8.86 ($3.45B on 389M diluted shares outstanding) from the prior guidance of $8.40 (#msg-87951230).
Assuming 5% earnings growth in FY2014 to $9.30 (which is pretty conservative), DE is currently trading at a FY2014 P/E of 8.9x and a FY2013 P/E of 9.3x. This is an unduly cheap valuation, IMO, for a conservatively run high-quality company that’s a premiere beneficiary of The Global Demographic Tailwind. I picked up some more shares today.
Market Data 
Markets 
AI
