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Why I bought Deere shares, as well as 2 others.

March 1, 2024
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I recently bought Deere and added more shares to 2 of my other positions.

  • Deere & Company

John Deere is the brand name of Deere & Company, an American corporation that manufactures agricultural machinery, heavy equipment, forestry machinery, diesel engines, drivetrains used in heavy equipment, and lawn care equipment.
 

Why I like Deere:

  1. Large Incremental Addressable Market: $150 Billion+
  2. Strong Brand: I know a few farmers, trust me when I say they have a strong brand.
  3. Strong Demand: Farmers continuously invest back intro their business. This leads to continuous demand for Deere.
  4. Agri is an industry that will always be in demand. People need to eat. In the 2008 recession, Agri even outperformed. There will always be opportunity in Agri.
  5. Opportunity for services to expand. Similar to how the App Store used iPhones to distribute services (App Store). They have the hardware, as well as the software roadmap.
  6. Dividend payer and dividends are continuously growing
  7. Attractive valuation for the long term, even though the share price had a massive run since well, just look at the chart. Deere is currently on a PE of 19. We could possible see a pullback, but then I would buy more. The share price has run hard the pst few years.
  8. Strong Revenue & Profit growth

Looking at their Q2 results:

Revenue increased 11% YoY to $13.37 Billion

Quarterly earnings rose 17%

Earnings for the year expected at around $7.2 Billion

Comment from CEO:

Deeres second-quarter performance reflected a continuation of strong demand even as we face supply-chain pressures affecting production levels and delivery schedules, said John C. May, chairman and chief executive officer.

 

The challenge they currently face, is the same as all hardware companies, supply chain issues, which increases costs.

Overall I like Deere for the long term, that is why it is a medium-size position in my portfolio.
 

 

  • I also bought more Twilio & AMD shares (I covered them previously)

 

I will share 3 more companies that I bought tomorrow here on the FinMeUp app.

 

(This is not financial advice. This is my personal opinions and what I am doing. Always do your own due diligence)


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