27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Bank of America Merrill Lynch downgraded AGCO Corporation (NYSE:AGCO) on data suggesting the global tractor market recovery is not materializing.
The firm downgraded AGCO from Neutral to Underperform and lowered its price target for the company from $75 to $70.
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At the time of writing, the farm equipment company's shares were sliding 2.75 percent to $72.60.
Weakness All Around
While AGCO expected flat Brazilian demand in the second half of 2017 following a sharp recovery in the first half, analyst Ross Gilardi said Brazilian tractor sales instead fell in the third quarter.
Citing Deere & Company (NYSE:DE)'s sunny outlook in Brazil, Giladi said competition might be taking a toll on AGCO.
Recent tractor data from Europe, which accounts for 80 percent of AGCO's EBIT, is incrementally weaker, Gilardi said. (See Gilardi's track record here.)
North America didn't fare any better, with a 14 percent decline in HHP tractor sales in September on top of a 2 percent drop in August.
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BofA lowered its 2018-19 EPS estimate for AGCO by 3-4 percent on the weak tractor data.
Valuation Unattractive
While the global tractor market data remained negative, Gilardi said AGCO stock was trading at an all-time high, discounting a sustained farm equipment recovery.
With the stock having hit BofA's previous price objective of $75, the analyst said he doesn't project it will push higher.
CNH Industrial NV (NYSE:CNHI) and Deere, though impacted by weak agricultural equipment data, are more diversified, with Buy-rated CNH Industrial remaining a compelling break-ups tory, Gilardi said.
Deere is expected to close soon on the highly accretive Wirtgen acquisition, which is yet to be reflected in consensus estimates, the analyst said.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.