Is Deere A Buy Going Into Earnings? (DE)

Everyone and their brother is talking about commodity this and commodity that, so it makes sense to think about the companies that get them out of the ground, like Caterpillar

and to a lesser extent Deere & Co.

. Shares of Deere have rocketed higher since August when Ben Bernanke announced he was dumping another round of quantitative easing into the market, and letting traders play with free money. Deere is the preeminent name in the agricultural sector, and farmers will attest to the reliability of its machines and equipment. The USDA just released a bullish crop report, saying there is less acreage for planting than initially reported, and this will benefit Deere. It's not expensive at all looking at next year's earnings, at just 15.8 times 2011 earnings. It has a decent yield, at 1.5% and given the strength in its underlying business, I would not be surprised to see a raise as the agricultural sector is booming. One drawback for Deere is that last quarter it said it saw sharp weakness in Europe, so investors will be anxious to see what it has to say when it reports in a couple of weeks. Whether it's a buy or not depends on your time frame. Personally I feel that we are due for a short term pullback in the broader market, and would add shares or initiate a position once the pullback is over with. Now, we may never get that elusive pullback. I've positioned myself for it, but it doesn't seem like the Fed will let that happen. Personally, I will be very anxious to see what Deere has to say in a couple of weeks, particularly about its outlook for 2011. Disclosure: no position