Consumer discretionary

Deere & Company (DE) Ready to Meet Its 52-Week High Exactly After One Year

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Despite shares sell-off from Warren Buffet and Bill Gates, the investors’ sentiment is rebuilt due to strong third quarter results

Yesterday, Deere & Company (NYSE:DE) surprised the investors through its better-than-projected third quarter financial earnings (3QFY16.) As a result, the shares observed positive flow from $79.37 to make a high of $88.09. At the time of closing bell, the shares were traded at $87.32, up 13.49%. The company is now very close to its 52-week high of $92.45, which it achieved on August 20, 2015.

3Q Financial Performance

The agricultural equipment manufacturing company not only beat the consensus of $6.056 billion estimates through its $6.724 billion revenue report, but also excited the Street with its $488.8 million (EPS: $1.55) adjusted net income disclosure, against $290.167 million (EPS: $0.943) projections. This created positive investors’ sentiments towards the company’s growth.

While conducting the earnings call, Deere & Company’s CEO and Chairman, Samuel R. Allen told the investors that the global recession hurt the farm business. This resulted in challenging construction-equipment market situation. However, the company performed better mainly due to its Agriculture & Turf business segment contribution, which reported better operating profit as compared to last year.

Insider Trading

Just prior to 3QFY16 announcement, the two billionaire activist investors, Bill Gates and Warren Buffet reduced their investments in Deere & Company. As per the filing disclosed with the US Securities and Exchange Commission (SEC) this Monday, Mr. Buffett’s Berkshire Hathaway Inc. reduced its holding by 6% to sell 1.32 million shares. Now its investment is restricted to 21.96 million shares.

On the other side, this Wednesday, Mr. Gates’ Cascade Investment, LLC filed SEC that it sold 85,000 shares in the market. Nevertheless, it remained one of the largest shareholders of Deere & Company with 31.42 million shares, which translated into 10% holding.

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