(CapitalWatch, Nov. 24, New York) I had sold Deere John stock a long time ago on a small profit to the best of my recollection. Why I parted ways with the stock I can't say. Maybe I was too young. But looking at your stock now, Deere John, it was certainly me, not you. But now I am back in if you will have me.
Deere & Company (NYSE: DE) just seems to keep performing, both as a company and as a stock long-term. Founded by John Deere and Charles Deere, John May took over as CEO in 2019 and has since driven the iconic American tractor and lawnmower company to new heights in one of the defter illustrations of corporate management during the pandemic era.
Sadly, for me, I am typically attracted to sexier stocks, in part because I write about them. And to me—which may be a sign of alarmingly low testosterone levels and/or my urbane living situation—tractors and lawnmowers and tools of any kind do not excite me. Let's just say that famous Tim Allen bit about men and tools was completely lost on me.
But investors who are excited about such things (or about making sound investments) may have done quite well with Deere. After falling to around $112 per share in March 2020 and hitting a high of over $394 per share this summer, it trades at $372.86 per share as of midday Wednesday, up over 6% on the day—spurred on by news that, despite a massive workers' strike, the farm and construction equipment maker posted annual net income of nearly $6 billion. That is more than double the $2.8 billion it earned a year earlier.
More than 10,000 members of the United Auto Workers union went on strike from Oct. 14 to Nov. 17. After a tough negotiation closely watched by labor unions at a time when workers finally had the upper hand, the company barely budged from its previous offer, rejected just two weeks earlier. John and management stayed strong, offering a slightly better deal which includes an immediate 10% raise, along with a $8,500 signing bonus, and other goodies including three lump-sum payments equal to 3% of annual wages and a cost-of-living adjustment to account for rising prices during this time of inflation.
So, is it a buy now?
I say yes, as John May has proven to be an adept leader. (May has been with Deere & Company since the mid-90s). Despite supply chain issues and workers' strikes and everything the pandemic threw at him and the company, Deere's performance both as a company and as a stock has been impressive. Having retreated from its all-time highs, going long on Deere—so long as John is driving—is a bet worth taking. If you do, you might have one more thing to be thankful for next holiday.
The opinions expressed by contributing analysts do not reflect the position of CapitalWatch or its journalists. The analyst may or may not have a business relationship with any company whose stock is mentioned in this article. Information provided is for educational purposes only, may be incomplete or out of date, and does not constitute financial, legal, or investment advice.