Agco (AG) is a former fund holding that remains my favorite equipment name; but as I've stated in the past I am using the fertilizer names as my proxy on the group due to the extra risks associated with equipment (plus the pricing power in fertilizer is unmatched). You can see from the chart at bottom of the entry that despite great fundamentals, the farm equipment charts look nothing like the fertilizer charts, so this focus on a "theme" (agriculture boom) but deciding how best to ride said theme, is important. I am highlighting their earnings report, to showcase that one needs to read about related stocks, even if not directly invested. I found a few very interesting comments... note the stock is down 8% today because they "missed" estimates. That is baloney and a good stock market lesson. Agco got hit the last time it reported for the exact same reason (Feb 7: Agco Reports - Guidance Disappoints) So last time around they beat by 19 cents but said they were aiming for $2.75 in EPS with "hopes of $3".

Now, 3 months later? They beat by a mile again (14 cents) and 'raised' THEIR guidance from $2.75 (hoping for $3) to $3.00-$3.15. That's an upgrade. But the analysts were in @ $3.23 so the news headlines blaring are a "miss" on guidance. Not from my perspective, but this is the Wall Street game.

Now I did find the Agco comments about the weakness in US farming interesting... it seems even our farmers are weaker than the global average? I am used to reading about it in every other industry (US market stinks, but international sales fantastic) - but I did not expect it in farming... here is my theory. All these farm bills go mostly to large corporate farmers (Cramerica, for the corporation, by the corporation). As with all things the small guy gets the short end of the stick. Agco says the weakness is in North American small tractors... which is what smaller scale farmers, mom and pop would use. So from that angle, if the thought process is correct, I could see the reasoning - higher fertilizer prices, and fuel costs are squeezing small farmers despite record crop prices - they get little of the $300B in farm subsidies since that is reserved for people who pay for politicians campaigns (corporations), so despite good times all around, they are "relatively" (still better off than the average American of course) more weak than the corporate farmers.