Tag Archives: alternative
Why Deere Shares Are In The ‘Buy Zone’ Now
May 27 2013, 13:36 | about: DE Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) Deere & Company (DE) is a leading manufacturer of farming, construction and forestry equipment as well as some consumer goods like riding lawnmowers. It also has a financial services subsidiary, the “John Deere Capital Corporation” which enables the company to provide loans and leasing to its customers. (click to enlarge) Deere shares were trading at about $94, which has been close to the top end of the recent range, but a recent pullback to roughly $86 has created a buying opportunity since this is at the low end of the recent trading range. (This is indicated on the chart by the light blue uptrend line.) Plus, the stock is trading near the 200-day moving average of $85.04, which is a key support level. This could mean that the stock has strong support around current levels. This, along with the fact that it is at the low end of the recent range, is why I consider this stock to be in the “buy zone”. Deere & Company recently reported second-quarter net income of $1.084 billion, or $2.76 per share. This compares favorably with net income of $1.056 billion, or $2.61 per share, for the same period last year. Revenues increased by about 9%, to $10.914 billion, which was a record. Strong demand for farm machinery and some new products led to these better than expected results. The company made positive comments on the quarterly results and for the rest of the year, it stated: “After a record-setting second quarter, John Deere is well on its way to another year of strong performance,” said Samuel R. Allen, chairman and chief executive officer. Second-quarter sales and income were the highest for any quarterly period in company history, he pointed out. “Deere’s results are a reflection of positive conditions in the global farm economy, which continues to show impressive strength. The company’s performance also offers further proof of the adept execution of our operating and marketing plans, which are aimed at expanding our global market presence.” There are a number of downside risks to consider. For example, another recession could reduce demand, and poor weather or natural disasters could impact crop planting. Another issue could be the Japanese Yen which has declined significantly in the past few months. This appears to be creating a significant competitive advantage in certain markets for Japanese companies like Kubota (KUB) which also makes farm equipment. Kubota shares have jumped from about $55 in February to around $80, which shows investors are expecting the decline in the Yen to significantly benefit that company. However, Deere seems to be managing these risks properly and so far, none of them have become insurmountable. Earnings estimates are $8.53 for 2013, and $8.77 for 2014. This puts the price to earnings ratio at just around 10 times earnings. That appears cheap when compared to the average PE ratio of 16 times for the S&P 500 Index (SPY). It also looks undervalued next to Caterpillar (CAT) which is expected to earn $6.87 in 2013 , but also trades for around $86. Caterpillar shares trade for nearly 13 times earnings which is a 30% premium to the PE ratio for Deere. Another positive is that Deere pays an annual dividend of $2.04 per share, which yields 2.4%. With the stock now at the low end of the recent trading range, strong financial results, a globally recognized brand, and a below market PE ratio, Deere shares appear to be giving investors a solid buying opportunity. Here are some key points for DE: Current share price: $86.29 The 52 week range is $69.51 to $95.60 Earnings estimates for 2013: $8.53 per share Earnings estimates for 2014: $8.77 per share Annual dividend: $2.04 per share which yields 2.4% Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor. Continue reading
Saint Lucia Signs Up For The Carbon War Room’s ‘Ten Island Renewable Challenge’
23 May 2013 Saint Lucia announced its intention to move towards a clean energy future by becoming the next economy to join Carbon War Room’s Ten Island Challenge, at the Caribbean Conservation Summit held on Necker Island, co-hosted by Sir Richard Branson, the Prime Minister of Grenada, and Premier of the British Virgin Islands. Launched at Rio+20 Summit in June 2012, by Branson’s entrepreneur initiative Carbon War Room and Christiana Figueres, Executive Director of the UNFCCC , the Ten Island Challenge aims to work with pioneering island economies to reduce dependency on fossil fuels through the acceleration of commercial opportunities on islands , attracting expert engineering firms and investment. “Solving the energy challenge and marine conservation challenge in the Caribbean go hand-in-hand. I am very pleased that Saint Lucia has decided to join the Challenge – and hope more neighbouring islands will follow,” said Branson. “We are joining the Ten Island Challenge because it is consistent with the goals of our government to develop a renewable energy sector and transition to a Green Economy,” said James Fletcher, Saint Lucia’s Minister of Sustainable Development & Energy. “We want to develop a renewables “blueprint’ using those islands that are ready today – and provide replicable models for many more communities isolated by water, desert or just distance from the grid,” said Jose Maria Figueres, President of the Carbon War Room. Saint Lucia is focusing its efforts to transition off fossil fuels through a range of initiatives from renewable energies as well as waste and water efficiency, said Carbon War Room. Although sustainability and low carbon plans aren’t new to island economies, successful implementation has so far been a problem. Carbon War Room said the Ten Island Challenge will highlight the opportunities on the island and that the initiative will reach out globally for the best solutions and most competitive bids. Saint Lucia joins its Caribbean neighbor, Aruba – who signed up for the challenge in 2012. Branson and Virgin Limited Edition have also taken an interest in the project, offering Necker Island as ‘demo site’ to launch a Request for Proposals (RFP) for the installation of renewable energy solutions. Issued in February, the RFP has already attracted a multitude of bids from USA, Europe, Asia and the Caribbean, and installation of both wind and solar solutions take place later in the year, said Carbon War Room. The announcement was made at the Caribbean Challenge Initiative (CCI) Summit of Political and Business Leaders, convened today on Necker Island/BVI. The two-day Summit brings together heads of state and corporate leaders to address the opportunity to protect the critical natural marine environment of the Caribbean region. Transforming Island energy systems to renewable sources is critical to marine and coastal conservation, and is imperative to the economic growth of the region, said Carbon War Room. Continue reading
Siemens: Europe Can Save €45bn By Optimising Renewable Energy Generation
21 May 2013 Josie Le Blonde In a six stage discussion tour to conclude with the World Energy Congress (WEC) in Daegu, South Korea in October 2013, Siemens will discuss the findings of an ongoing study with the Technical University of Munich to examine energy systems worldwide – with the aim of ascertaining their utilisation rate of resources, reliability of supply, sustainability and cost-efficiency. The first Round Table is taking place at the 1st European Energy Congress in Brussels and focuses on the European energy system, which the company believes is inefficient to the point of damaging the continent’s competitiveness. With its ambitious goals, Europe is playing a pioneering role in the development of a sustainable energy system. Yet at the same time, says Siemens, concerns are increasingly being expressed that the EU is endangering its competitiveness with these plans. Siemens says it has analysed the electrical power producing systems across Europe and identified considerable potential for optimisation, especially in connection with plans to expand power generation from renewable energy sources. The company estimates that building and expanding renewable energy installations in the wrong locations is costing Europe €45bn in unnecessary investment . In Germany alone, says the company, potential savings are possible on a magnitude of 4-5 times the annual investment in solar and wind power plant construction. The crux, according to Siemens, lies in the choice of location: installations must be built at the sites in Europe that offer the highest power yields. “In Europe, just the new photovoltaic capacity alone to be built by 2030 amounts to about 138 gigawatts. If these facilities were erected at the sunniest sites, we could save 39 gigawatts of solar equipment – for the same power yield,” said Michael Süß, member of the Corporate Executive Committee of Siemens AG and CEO of Siemens’ Energy Sector. “The choice of site is crucial to the efficiency and economy of wind power, as well,” he added. Elsewhere, in Norway for example, favourable topology means the nation can rely almost exclusively on hydropower, says Siemens. At the same time it is a major producer of natural gas, most of which it exports. By contrast, very little of its abundant hydropower is presently exported via long-distance transmission lines, despite the great demand for imbalance (i.e. balancing) energy in many countries of Europe. In the UK and Germany, both of which intend to hugely expand their offshore wind power generation over the next decades, wide fluctuations in power generation due to changing weather conditions dictate that large-scale energy storage or high-capacity exchange arrangements with other countries be put in place, says the company. Overall, Siemens says it has spotlighted four main levers for optimising energy systems worldwide that can be more or less effective depending on the regional characteristics of the power grids and the power plant fleet: Local optimisation of renewable power installations: This means exploiting regional power generation potentials to the full, and involves finding the best sites for solar installations, hydropower storage facilities and wind power farms, and expanding the grids to match; Enhancing the efficiency of the power system as a whole: For instance, the average efficiency of coal-fired power plants in Europe is only 38 percent, whereas modern plants can reach up to 46 percent. Installing more efficient electrical equipment in industry and households would cut CO 2 emissions and costs even further; Improvements in the power plant mix: Switching from coal fuel to gas-fired power plants would considerably reduce the volumes of carbon dioxide emitted by conventional power generation. This alone implies an annual CO2 savings potential of 365 million tons in Europe. That is equivalent to half of all emissions in Germany; More use of electric power for energy needs: Instead of generating power locally at low efficiency and burning oil and natural gas to heat buildings, power could be generated more efficiently in large-scale power plants, and high-efficiency electrical heating systems could be used in thermally insulated houses – at least in regions with broad-scale power grid coverage. Further interim findings covering Asia, the USA, China and the Middle East are to be presented and discussed on June 4 in Moscow, on July 9 in Juno Beach, Florida, on August 1 in Beijing and on September 4 in Abu Dhabi. A preliminary overall global analysis is to be presented in Daegu, South Korea, on October 15. Continue reading
