1. Deere & Company (NYSE:DE)

2. THESIS  Deere is a well-positioned company in the heavy machinery industry with a number of growth opportunities. It has an impressive financial track record and appears to be undervalued relative to its growth and the industry.

3. AGENDA  Opportunities  Risks  Competitive Analysis  Financial Analysis  Valuation

4. OPPORTUNITIES  Agriculture and Turf  Makes up 78.4% of revenues  Saw 8% growth over last quarter and 12% over the past three quarters  Continued expansion in emerging markets (specifically Brazil, Africa, and Middle East)  Increased financing in Africa, agricultural automation  Construction and Forestry  14.7% of revenues  11% decline over last quarter and 8% decline over the past three quarters  U.S Census Bureau showed 5.4% growth in construction spending during the first seven months of 2013 YoY  Financial Services  5.9% of revenues but 14% of operating profits

5. RISKS  Economic growth rate in emerging markets has been lower than expected  The Brazilian Real has been depreciating against the USD and could hurt Deere in exchange rates  Construction and Forestry could continue to drag on the business

6. COMPETITIVE ANALYSIS  Main competitors: Cummins, Caterpillar, CNH Global, AGCO  Cummins revenue fell 4.0% last year  Caterpillar is the biggest player in the mining industry. The mining industry has performed poorly recently.  CNH Global – subsidiary of Fiat  AGCO – promising company, however, DE has better margins and I believe DE has a better valuation

7. COMPETITIVE ANALYSIS

8. FINANCIAL ANALYSIS  12.9% revenue growth from the 2011 to 2012  39.0% revenue growth from 2010 to 2012  On pace for 4.5% revenue growth this year  10.7% EBIT growth from 2011 to 2012  43.8% EBIT growth from 2010 to 2012  On pace for 15.8% EBIT growth this year  Current Ratio: 2.22  Dividend Yield of 2.46%

9. VALUATION  Despite all of this growth, Deere stock price is flat over the past year  EV/EBIT is 10.24, below industry average of 12.41  P/E ratio is 9.44, below industry average of 11.95