Caterpillar Vs. Deere: Who Wins?

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Jeff Yaede was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

TraderMinute Founder Jeff Yaede discussed Deere & Company DE on the show following its Q2 earnings release.

Yaede noted that agricultural sales at Deere had continued to fall, however, the company was still profitable, which Yaede attributed to the company’s good management.

Looking more closely at the company's performance by market segments, Yaede said the the most interesting number in the company’s Q2 report was construction sales, which showed a gain of approximately 2 percent.

The strength in construction and the weakness in agriculture is partly why Yaede was less than enthusiastic about Deere's stock.

From a trading perspective, Yaede felt Deere could be quite volatile and when looking at construction numbers and price action, he preferred Caterpillar Inc. CAT over Deere & Company in the three to six month timeframe ahead.

Notably, Raymond James also recently commented on Caterpillar’s construction industry sales.

Because certain parts of Deere’s revenue and core business were falling, Yaede did not want to “spend time chasing a big upmove.”

Yaede cautioned against shorting Deere’s stock, however, as Warren Buffett’s recent 13F filing showed the company to be one of his holdings. “When that happens, I never want to bet too much against it,” Yaede said.

Related Link: John Deere Downgraded At Baird, Long Thesis Has 'Played Out'

Deere & Company recently traded at $93.86, up 0.55 percent, while Caterpillar Inc. recently traded at $87.69, down 1.06 percent.

Listen to the show here:

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Posted In: Analyst ColorLong IdeasShort IdeasExclusivesTrading IdeasInterviewJeff YaedeRaymond JamesTraderMinuteWarren Buffett
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