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Thoughts on Deere (DE)?
#1
I'm glad I bought it at $85 a share, but I can't think of a reason to keep holding it at $155 a share. It is so far from my thesis at this point. The dividend does not grow, the yield is paltry, the P/E is way too high, and earnings growth is weak. I'm thinking today's 6% pop is the perfect time to sell and put the proceeds into something much more productive (like T, or MO, or GIS, or BEN...).

Anyone have thoughts to the contrary?

Thanks!
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#2
I sold out of almost all my DE back at $163 months ago. I kept 25 shares which was my profit and just was going to let it run. But it is very expensive which is why I sold in the first place. However the #'s today were fantastic which tells me the run isn't over yet and may test the old highs. Selling at these levels I cant blame you. Your up big and you never can go wrong with money in your pocket. At the same time I do prefer DE over all those name you listed. MO, T, GIS and BEN act more like bonds. It seems most investors these days are avoiding interest sensitive stocks

If I'm selling out of DE I would much rather put it in names like UTX, ITW, AMGN, WFC, CVX and ABBV. Those are the name I like right now. All at reasonable prices, good growth and pay a nice yield. ITW and AMGN have come down lots off there highs.

Good luck
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#3
Just did a quick scan of the release and conference call transcript and think it might be worth holding on to. 

Might earn close to $10 this year, and with a 25-35% payout ratio target, I wouldn't be surprised if they raised the dividend from $0.60 to $0.75 by the end of the year.

At $155 right now, that gives a forward PE of 15-16 and a potential forward yield of about 1.9%.

Not cheap, but not outrageously priced either.
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#4
I did sell half of my DE position. My cost basis was so low that I decided to just keep the other half of the shares longterm, but same thoughts as Kerim on this.
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#5
I'm not big on selling just because a stock ran up in price. I'm not a buyer at these prices, but if I owned shares of DE, I wouldn't be selling.
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#6
All fair points, thanks. I definitely don't sell lightly, and in this case it is not just about the current price. I hold plenty of things that look overvalued. But I'm also refocusing on what I want out of my portfolio, and am going to be emphasizing quality and core DG positions. And to my eye, DE just doesn't fit the bill. I want less exposure to cyclical / industrial names, and though the dividend might increase over time, there won't likely be much regularity or predictability to it. I'm not as optimistic about their earnings, and so the valuation looks rich to me, and so seems like the right time for me to get out. But differences of opinion is how we get a market!
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#7
(05-21-2018, 11:53 AM)Kerim Wrote: All fair points, thanks. I definitely don't sell lightly, and in this case it is not just about the current price. I hold plenty of things that look overvalued. But I'm also refocusing on what I want out of my portfolio, and am going to be emphasizing quality and core DG positions. 

Same here.  The ultimate end goal is to live off dividends and sleep well at night.  I rarely sell, and when I do I usually keep a few shares and forget about them, sort of like a lottery ticket that may eventually be a nice bonus.
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