5 Best Agriculture Technology Stocks To Buy Now

3. Deere & Company (DE)

No of HFs: 42

Dollar Value of Hedge Fund Holdings: $1.3 billion

We previously highlighted DE in our Top 10 Robotics Stocks To Buy list. Cathie Woods’ ARK Invest has a large position in Deere. Here is what First Eagle said about DE in its 2020 Q3 investor letter:

“Deere & Company manufactures and distributes equipment used in agriculture, construction, forestry and turf care in more than 30 countries. The company executed well in what has been a supportive environment for its products marked by strong pricing in agricultural commodities and robust crop yields. Notably, Deere successfully rolled out price increases in its Agriculture & Turf division, which improved its operating margins.”

Massif Capital was a bit bearish about DE earlier in 2020. Here is what they said in the spring of 2020:

“John Deere continues to excel at setting and surpassing their own quarterly expectations. The market rewards them for doing so; their stock appreciated ~7% on the day they announced earnings, even as their underlying financials paint a rather bleak picture. Messaging from senior management focused on the stabilization of the U.S. agriculture industry. The passing of the USMCA and the Phase I trade deal last fall certainly put some life back into their sails, even if it’s not at all clear how accretive this is for the U.S. farmer, let along DE’s income statement. Compared to 2018, DE’s first quarter 2020 net sales (which concluded on January 31 and did not incorporate any of the COVID19 effects) fell 6%, led by their agriculture & turf division falling 4%, construction & forestry falling 10% all balanced out by their financial services division gaining 9%. Total operating profit for the firm fell 16% year-over-year, primarily driven by a sharp 59% drop in the operating profit from construction & forestry.

Deere’s headline acquisition of Wirtigen in 2018 seems to be causing more headwinds than tailwinds thus far. The firm’s 2020 outlook does not provide much relief. Prior to the knowledge that the pandemic would effectively press pause on economic activity for an unknown period of time, both their agriculture and construction divisions were expecting sales to contract 10-15%.”