BOSTON ( TheStreet Ratings)-- The Dividend Stars portfolio returned 1.97% in a shortened November (the portfolio was launched November 10th), exceeding the total returns for the S&P 500 Index over the same period by approximately 1.22%.
US Investors, spooked by the lingering uncertainty surrounding the state of European affairs, ran for the exits in mid-November, driving the S&P down by over 9% from Nov 8th to Nov 25th. News that the major central banks would provide lending assistance to Europe helped the market regain some steam, as the Index clawed back over the final week of November. There were no changes to the portfolio during the month.
Deere & Co (DE - Get Report) , the portfolio's best performer in the month, returned 7.7%, fueled by an impressive quarterly earnings report. The company announced strong results across the board, with Agriculture and Turf equipment sales up 20% year/year, and Construction and Forestry sales up 34% Deere forecast slightly lower farm cash receipts and commodity prices for 2012, yet issued net income guidance of $3.2 Billion, higher than previous forecasts. This equates to $7.88 in EPS for 2012, leaving the stock trading at just 10x EPS for next year. I think a continued supply/demand imbalance for global grain inventories will favor Deere into 2012 and beyond. I apply a conservative P/E of 13 (historical levels range between 14x and 16x) to next year's earnings, putting the stock at $102/share by the end of 2012.