On tonight’s MAD MONEY on CNBC, Jim Cramer wanted to feature agriculture by interviewing Deere & Co. (NYSE: DE). If you want to own a company that wins off of food for fuel and the that wins off of agricultural machinery, Cramer said you want Deere & Co. (NYSE: DE). He noted that this is up 149% since he started recommending it in 2005, and the company outperformed on last earnings. Last night he discussed some of this in a Hillary Clinton interview, and he also gave his five favorites earlier this week to profit off of agriculture. He interviewed Bob Lane, CEO of Deere, and here are the paraphrased answers:
Why is there sustainability this time in a boom and bust historical business?
People around the world are doing better and when they do better they eat better.
As far as emerging markets?
The company can help improve and can deliver ag equipment to many, and there is a secular change of people wanting to eat better. There will be ups and downs, but the change is here to stay.
As far as alternatives and the price of grain, are you concerned that prices can only go down?
There will be changes in price, many down, but one-quarter of the world is doing significantly better and demand will stay strong.
As far as twin tailwinds from ethanol and worldwide rising up of people who want better food, which is more important?
The growing demand for food is more important, but biodiesel and other food for fuel matter.
As far as candidates not liking NAFTA, are you not concerned that NAFTA could change?
The large combine in Illinois ships one-quarter of the units outside of the U.S., and without global markets many customers are not prospering any more.
Cramer said you have his blessing to BUY Deere stock anywhere below $100.00, because you’ll keep making money with this one long after the show. Deere shares closed up 0.8% today at $86.97, and shares were up marginally at $87.40 after the interview. Its 52-week trading range is $51.59 to $94.77.
Jon C. Ogg
February 28, 2008