1 / 22

GLOBAL Investment Research Challenge

GLOBAL Investment Research Challenge. Greg Goin Brad Kuhn Mark Spurgeon Ken Sturgis Tim Su. Company Overview. Equipment Operations Agricultural Commercial/Consumer Construction/Forestry. Financial Services Dealer Financing Crop Mitigation Wind Energy Generation. Industry Overview.

lirit
Télécharger la présentation

GLOBAL Investment Research Challenge

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. GLOBALInvestment Research Challenge Greg Goin Brad Kuhn Mark Spurgeon Ken Sturgis Tim Su

  2. Company Overview Equipment Operations • Agricultural • Commercial/Consumer • Construction/Forestry Financial Services • Dealer Financing • Crop Mitigation • Wind Energy Generation

  3. Industry Overview • Dependence on Crop Prices • Exposure to Recent Housing Collapse • BRIC Expansion • Competitive Industry • HHI : 0.31

  4. Change in Institutional Holdings * Institutional Ownership Makes Up 75% Of Shareholder Base

  5. Overvaluation High Leverage Exposure to Housing Market ROA vs. WACC Market Volatility Recommendation: Underperform

  6. Stock Performance * SP 500 10x

  7. Fundamental Analysis • D/E • 4.9 Deere vs. 2.9 Industry • Inflated ROE Due To High Debt Levels • ROA vs. WACC • 5.3% vs. 4.4% • Day Sales Receivable • 256 vs. 179

  8. Increased volatility in stock price due to increasing beta Deere and Co. Beta

  9. CAPM • Beta: 1.18 • 5 Year Treasury Rate as of 12/31/2007: 4% • Market Risk Premium: 7% • E(R): 12% *All Data is from 2003-2007

  10. Net Farm Income To Stock Price

  11. Valuation • Constant Growth Model -Value of Stock: $27.18 • Projections From Analysis On Net Farm Income • 2009 Projection 38.17 • 2010 Projection 40.14

  12. Summary • Exposure to Unsystematic Risk • Increasingly High Leverage Levels • Saturated Market Limiting Domestic Growth • Valuation Models Show Overvaluation

  13. Appendix Fundamental Analysis

  14. Net Farm Income Farm Income In Billions

  15. Income Statement Cont’d

  16. Balance Sheet Cont’d

More Related