Agco Farm Equipment

The Zacks Analyst Blog Highlights: Titan Machinery, Deere, AGCO Corp, CNH ...

Because our quantitative model relies so heavily on analyst estimates to gauge the earnings momentum trend. Clearly, the analysts were not expecting a blow-out number and this was reflected in the milder Zacks Rank. But the stage was still set for a surprise because of the earlier #1 Rank and an understanding that the Zacks Rank can fall when old data drops out of the 60-day window used.

The key take away here is that stocks with a Zacks Rank of #1 or #2, as TITN had consistently been since December of last year, have a high probability of being companies that will report positive earnings surprises. This is true, and proven by the data, because the Zacks Rank stock rating system emphasizes the trend and momentum of earnings estimate revisions, and thus tends to be predictive of stock prices, upward revisions, and upgrades even when analysts may be cautious or late.

Three Fundamental Indicators

Titan is only a .

Where else could one have looked for clues about the market for its inventory and rentals of the Case and New Holland brands of agriculture and construction equipment? Industry strength could be seen in a few different ways and I will list three, in order of importance from the most data-driven and reliable to the most anecdotal.

First, the profit picture for the manufacturers of farm machinery has been on fire. Deere (NYSE: DE ) has been a leader for over a year, but currently topping the list of Zacks #1 Rank stocks in this industry are AGCO Corp. (NYSE: AGCO ) and CNH Global (NYSE: CNH ), the parent company which owns the Case and New Holland brands. Even engine manufacturer Briggs & Stratton (NYSE: BGG ) carries a #1 Rank, boosting this industry group of seven names to a number 5 out of 265.

Second, the main driver of strong profits from these companies is rising grain demand and prices, in addition to revenue growth from their construction equipment divisions. And the trend of higher grain prices looks poised to continue after today's government report indicating supplies will get tighter as new planting will not meet demand.

Third, I attended the World Agricultural Investment Conference in for new investments, both domestic and abroad. This money will pour into farming land, corporate farm development, infrastructure, transportation, chemicals, seeds, and biotechnology, water use and irrigation, machinery, processors, grocers, a dozen other logistical points in the supply chains.

DISCussions: Beloit, Kansas Hosts European Visitors - AGCO Blog

On 25 May 2011, AGCO Challenger dealers hosted nearly twenty customers from Hungary, Germany and Austria to a rain-soaked visit in Kansas, USA.  The visitors were part of the Challenger Tour 2011 to experience farming operations in the United States and see first-hand how AGCO farm equipment is produced.  After landing in Chicago, USA the group visited a farm in Iowa.  During their stopover in Minnesota they toured the AGCO Jackson facility. They spent the night in Kansas City, Kansas before arriving in Beloit.  A tour of AGCO Hesston and of a Wichita, Kansas grain elevator completed their North America journey.

The schedule of events in Beloit included a barbeque lunch, plant tour and farm visit.   As anyone knows who lives in, or regularly visits, the Plains States region, weather plays a large factor in outdoor activities.  This trip was no exception.

The week prior, Kansas fields were dangerously dry.  On the day the guests were to be at a farm site, it was still raining from the previous stormy night.  Consequently, the barbeque was moved indoors and the plant tour took a little extra time.  Eventually, there was enough of a break in the rain to stop by one local farm west of Beloit.

The group was able to look at the machinery and “talk shop” comparing farming practices.

Engineering Manager, Rye DeGarmo had this to say, “the highlight of the trip was the farmer-to-farmer discussion.  Both the local and European farmers were interested in each others’ farming practices, especially yield amounts and fertilizer usage. Farmers from both continents were surprised to find the numbers of large farms are growing in a very similar fashion to their own — but on opposite sides of the world.”

What is considered a large farm where you live?