Deere (DE) Rising Before The Market Opens

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Deere ( DE) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Deere as such a stock due to the following factors:

  • DE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $247.0 million.
  • DE traded 21,737 shares today in the pre-market hours as of 8:01 AM.
  • DE is up 3.6% today from yesterday's close.

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More details on DE:

Deere & Company, together with its subsidiaries, manufactures and distributes agriculture and turf, and construction and forestry equipment worldwide. The stock currently has a dividend yield of 2.7%. DE has a PE ratio of 11. Currently there are 3 analysts that rate Deere a buy, 6 analysts rate it a sell, and 6 rate it a hold.

The average volume for Deere has been 2.5 million shares per day over the past 30 days. Deere has a market cap of $30.3 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.00 and a short float of 8.8% with 11.41 days to cover. Shares are up 0.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Deere as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, notable return on equity and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:
  • Net operating cash flow has increased to -$510.10 million or 31.64% when compared to the same quarter last year. In addition, DEERE & CO has also vastly surpassed the industry average cash flow growth rate of -31.77%.
  • DE, with its decline in revenue, slightly underperformed the industry average of 10.5%. Since the same quarter one year prior, revenues fell by 16.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • In its most recent trading session, DE has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, DEERE & CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for DEERE & CO is currently lower than what is desirable, coming in at 32.63%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 6.05% trails that of the industry average.

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