Former US President and current candidate Donald Trump made it clear that American manufacturing is a priority for his platform. He just threatened to slap Deere & Co. (DE) with a 200% tariff should they go through with their plans to move manufacturing to Mexico – provided he wins the election, of course.
Deere & Co. has been struggling with rising costs, and the move would help improve profitability given the substantially lower labor costs available in our neighbor to the south.
But, this move would also involve more than 610 American workers being laid off from their jobs across the company’s Iowa and Illinois manufacturing facilities.
Trump addressed this at a campaign event, saying “I’m just notifying John Deere right now, if you do that, we’re putting a 200% tariff on everything that you want to sell into the United States.”
The threat was met with applause from the Republican crowd as the siphoning of US jobs has been a grave concern for some time. Deere’s move is especially divisive at a time when illegal immigration from Mexico is at an all-time high.
But, business is business, and Deere is feeling the effects of a drop in farming revenue. The US Department of Agriculture (USDA) forecasted a 10% downturn for the industry this year, meaning fewer farmers are upgrading their equipment fleet. As a result, Deere lowered its forecast for the remainder of the year, citing lower crop prices specifically.
Fortunately, Trump’s warning didn’t impact the stock’s performance. On the contrary, DE is up more than 4% in the past week and 9% over the past 3 months. We’ve taken a closer look at DE in the VectorVest stock software and found 2 other reasons to consider buying this stock today.
DE Has Poor Upside Potential, But Good Safety and Very Good Timing Create a Buying Opportunity
VectorVest distills complex technical indicators and fundamental data into clear, actionable insights to help you win more trades with less work and stress. You’re given everything you need to make calculated, emotionless investment decisions in 3 simple ratings.
These are relative value (RV), relative safety (RS), and relative timing (RT). Each sits on a scale of 0.00-2.00 with 1.00 being the average, allowing for quick and easy interpretation. It gets even easier, though.
VectorVest provides a buy, sell, or hold recommendation for any of the 18,000+ stocks it tracks on a daily basis, derived from the overall VST rating for the stock. As for DE, here’s what we found:
- Poor Upside Potential: The RV rating is a far superior indicator than the typical comparison of price to value alone because it compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. DE has a poor RV rating of 0.75 right now. The stock is overvalued, too, with a current value of just $280.63.
- Good Safety: The RS rating is a risk indicator. It’s computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. DE has a good RS rating of 1.11.
- Very Good Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. DE has a very good RT rating of 1.27, reflecting its recent performance.
DE has a fair overall VST rating of 1.09, but the stock is still rated a BUY despite poor upside potential. Before you make that next move, though, take a moment to review this free stock analysis. Trust us, you’re not going to want to miss out on this opportunity!
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VectorVest advocates buying safe, undervalued stocks, rising in price. DE is up 4% this week despite being threatened with 200% tariffs from former president and current candidate Donald Trump. The stock’s good safety and very good timing outweigh the poor upside potential right now, earning the stock a BUY recommendation in the VectorVest system.
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