Don't Panic, Buy Smart With Deere and Navistar

For investors who seek less uncertainty and want to invest in a company that is already doing well, Deere (DE) may be the better choice. DE announces their latest quarterly results on Nov.21.

Warren Buffett's holding company reported that as of Sept. 30, it owned a total of 4 million shares of DE, which provides products and services primarily for agriculture and forestry worldwide. Buffett likes companies that pay dividends, and DE has a 2.15% yield-to-price as of Nov. 15.

That represents a conservative payout ratio of 23% of earnings. From a value standpoint, DE has a low forward (1-year) price-to-earnings ratio of 10 and a low price-to-earnings-to-growth ratio of 1.10.

For the Nov. 21 earnings confessional, analysts are estimating around a 16% increase in quarterly EPS and close to a 12% increase in sales revenue. The chart below shows why DE is an attractive investment.

DE data by YCharts

So remember before you tighten your stop losses too tight, that the "Big Players" are buying companies with either great intrinsic or potential value like Navistar or solid EPS growers like Deere.

Both have bright futures, but Deere's success strategy is so much more transparent. Investing by following the company insiders' example and buying what the smart money is buying often pays off.

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As of the time of publication the author held no positions in any of the companies mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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