A potential SHORT idea...please, as always do your due diligence...I believe the price action has propelled DE into Cloud-9 valuations, and the best is likely already priced in....DE has likely pulled forward a bevy of future earnings these past 2-quarters; and future price action is about future earnings and revenues, not current and past earnings and revenues!
DE has rallied incessantly (due to stimulus) checks, and
historically low-interest rates and their extended payment options....” 0% APR fixed rate for 72 months† [side note I bought 2-machines using basically
free money for 6-years]
Ø DE posted a high of ~$182.00 in 2019 however from the lows of $106.25+/- on 3/19/2020. It has risen ~270% helping to power the indexes and ETF’s it resides in higher, as you can see from the earnings chart below DE’s earnings were higher in 2018 & 2019 than they were in 2020 and 2021, and its stock price was nearer 50% of today’s value!
Agriculture and construction machinery maker Deere (DE) was hit hard by the pandemic as softer commodity prices and sluggish building activity weakened demand for their equipment. After a rough first half of 2020, green shoots emerged during DE's fiscal 2020Q3 (ending July), followed by a notable recovery the next quarter as the company blew out expectations. Since DE does not provide quarterly guidance, their results can widely deviate from analysts' estimates. When times are good, the company tends to surpass expectations and vice versa. The $1.70/share positive EPS surprise this past quarter was significant [likely pulling forward demand] ... In the midst of the pandemic, DE's Construction & Forestry segment bore the brunt of the downturn. This business segment which manufactures loaders, excavators, and dump trucks, has significant exposure to road-building projects and to the oil and gas industry. As crude oil prices deteriorated oil and gas producers scaled back on drilling activity, curbing orders for DE's equipment. Consequently, sales in the Construction & Forestry business dove by 25% in 2020/Q2 and by 28% in 2020/Q3...the beat was likely buoyed from by improving economic activity and constrained output, crude oil prices have basically doubled from last May (likely not to be repeated again). The vastly improved financial conditions in the oil and gas industry helped fuel a major rebound in this segment: during 2021Q1, revenue increased 21% year/year to $2.5 billion.
DE is best known for its farming and agriculture machines, which make up the bulk of its business. Our U.S. farming industry is poised to thrive this year after the pandemic drove food demand sharply higher. Rising prices for agriculture commodities, such as soybeans, corn, and wheat, reflect the bullish conditions for farming.
DE's upgraded product roadmap, combined with the strength in their end markets, provided the firm with sufficient confidence to lift their FY-2021 net income guidance to $4.6 to $5.0 billion from $3.6 to $4.0 billion. With the stock up over ~220% from last March's low point, investors are clearly seeing greener pastures ahead. The huge rally indicates that some of the good news is already priced in, but with momentum building under DE's business, investors may be harvesting more gains this year.
SO I am looking to SHORT DE......
Developed 05-10-2021 Next earnings May 21st S&P EPS consensus: $4.38 S&P revenue consensus: $10.27 billion, likely as good as it gets I will be SHORT (400-shares) of “DE” at $419.95 or a failure to hold above $405.00 once obtained.....1st downside target $348.75 thereafter $305.00 I like using a Call-spread, or a vertical PUT buy-write strategy to implore leverage; out 7-12 weeks... Its is of course optionable Current P/E = 36.00+/- Forward P/E = 26.75 281-million share float 1.2% Short interest VERY overextended in my opinion as this stock a year ago was trending in a near $135.00+/- to $189.00+/- and has gone parabolic this past year.
My near-term indicators are now on a SELL 12 out of 13
indicators. These levels below sport a 75% and 85%
confidence/probability factors.
Please my friends keep an eye on the DEBT With debt & leverage at all-time highs, rising interest rates will lead to the mother of all credit crises. And what if the FED and other central bankers manipulate rates low? With 10,000 baby boomers turning 65 every day, historic low rates (screwing savers) are leading us into the mother of all pension crises; but these are not the favorite people of those in power!
PLEASE TRADE CAUTIOUSLY on the LONG & SHORT side, be quick to book profits and in times of uncertainty it’s ALWAYS very prudent to wait till the smoke clears if you are uncertain; remember trade when perceived risk to reward favors your trades; and that NOT to trade is often a prudent decision as well!
DISCLAIMER
Wise Owl Wealth Mastery is
neither an investment advisory service nor a registered investment advisor or
broker-dealer and does not purport to tell or suggest which securities
members/subscribers should buy or sell for themselves.
Members/Readers/Subscribers are responsible for their own investment activity
and should always check with their licensed financial advisor and their tax
advisor to determine the suitability of any investment prior to engaging. Materials may only be quoted or reproduced by permission and release
only. Please remember...these ideas, signals, and/or market-timing-suggestions are not a
recommendation to buy or sell any equity/option, it is an informational
technical analysis which allows you to better understand market technicals,
technical analysis, and positional trading information. These summations offer
information on previous suggested potential trade recommendations or potential
trades and various technical trigger points for trading opportunities. These
alert features are an information service for subscribers only. As always,
trading and investing involves inherent risk you should always seek the advice of a professional
advisor before making any investment decisions.
As all investment entail inherent risk; Wise Owl Wealth Mastery research
seeks to assist investors in determining for themselves when to buy and when to
sell to attempt to maximize profits or minimize losses. All final investment decisions are yours and as a result you could
make or lose money. Wise Owl Wealth Mastery ,
its employees and/or its affiliates and family members may from time to time
take positions in the open market or otherwise with respect to the securities
discussed. Wise Owl Wealth Mastery its
employees and/or affiliates do not have stock ownership equal to or greater
than 1% of the outstanding stock of the covered company nor does any employee
of Wise Owl Wealth Mastery sit
on the Board of Directors of any covered company. Wise Owl Wealth Mastery is
not a broker/dealer, and the firm does not underwrite securities, manage assets
or perform investment banking activities. The statements made herein include
information obtained from sources believed to be reliable, but no independent
verification has been made and we do not guarantee its accuracy or
completeness. The statements made herein contain general information and do not
constitute an offer to buy or sell any security.
The results posted here are hypothetical
in nature, due to the lag time between writing, posting, uploading, reading,
research and execution others could achieve different results; as there may be
differences between the signal (s) given and the fill achieved by the
listener/reader. Fills could be better and/or worse, but in reality the chances
for different fills exists. Wise Owl Wealth Mastery makes
every effort to give advance notice of intended signals and indicates potential
price targets / trigger points for reference, based on technical developments.
Subscriber results may vary, depending on activity level and aggressiveness.
This forum is intended for educational purposes only... Remember trading
involves risk and should not be undertaken by anyone not ready to accept such
risk...when a subscriber acts on any educational/technical/fundamental material
presented via this forum s/he agrees to accept all the inherent risks
personally. Again these signals presented here are for educational purposes
only and are not meant to imply a recommendation for/against said
equity/option. The Analyst in this forum doesn't give individual and/or
specific advise to any individual trader/subscriber. All information posted is
for ALL readers/subscribers and is not meant to be directed toward any
individual trader/subscriber.
Wise Owl Wealth Mastery publishes
educational information and research regarding companies in which we believe
our readers may be interested and our reports reflect our sincere opinions.
However, our material is not intended to be personalized recommendations to
buy, hold, or sell securities. Investments in the securities markets, and
especially in options, are speculative and involve substantial risk. Only you
can determine what level of risk is appropriate for you. We encourage you to
get personal advice from your professional investment advisor and to make
independent investigations before acting on information that we publish you MUST and should do
your own due diligence before you take any action in the purchasing of stocks
or options. A portion of our information is derived directly from information
published by the companies on which we report and/or from other sources we
believe are reliable, without our independent verification. Therefore,
we cannot assure you that the information is accurate or complete. We do not in
any way warrant or guarantee the success of any action, which you take in
reliance on our statements, and or educational information. We encourage our
readers to invest carefully and to utilize the information available at the web
sites of the Securities and Exchange Commission at http://www.sec.gov and
the National Association of Securities Dealers at http://www.nasd.com.
You can review public companies' filings at the SEC's EDGAR page. The NASD has
published information on how to invest carefully at its web site. We are not
compensated in any way for publishing information about companies mentioned in
our reports and publications.
Delivery,
and or timely delivery of Internet mail is not guaranteed. Wise Owl Wealth Mastery therefore
recommends that you do not rely on email as your sole method of communication
with us. Wise Owl Wealth Mastery recommends
using a POP3 or IMAP email account with an email client suc as Microsoft
Outlook or Eudora. Free web-based email accounts are not advised as they are
subject to quotas, filters and frequent delays.
Please
email any comments or questions to Steve at sgttraining@comcast.net
No comments:
Post a Comment