DE is below Peter Lynch Earning Line

From my watch list, let’s have a short view of Alliance Resource Partners LP (ARLP), that looks undervalued based on the Peter Lynch Price Value.

Deere & Co (DE)

Description:Â The company has a market cap of $30,643 M. It is a provider of advanced products and services for agriculture and forestry and a major provider of advanced products and services for construction, lawn and turf care, landscaping and irrigation. The company and its subsidiaries have operations which are categorized into three major business segments: agriculture and turf; construction and forestry; and credit. The agriculture and turf segment, created by combining the former agricultural equipment and commercial and consumer equipment segments, manufactures and distributes a full line of farm and turf equipment and related service parts –Â including large, medium and utility tractors; loaders; combines, cotton and sugarcane harvesters and related front-end equipment and sugarcane loaders; tillage, seeding and application equipment, including sprayers, nutrient management and soil preparation machinery; hay and forage equipment, including self-propelled forage harvesters and attachments, balers and mowers; turf and utility equipment, including riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles and commercial mowing equipment, along with a broad line of associated implements; integrated agricultural management systems technology; precision agricultural irrigation equipment and supplies; landscape and nursery products; and other outdoor power products.

Ratios: DEÂ has a ROC of about 11.33%, a ROA of 4.78% and a ROE of 29.22%. All these ratios are better than 90% of other companies of the Global Farm & Construction Equipment Industry.

Compared to history of Deere & Co, ROC reached a maximum level of 30.93, ROA reached a maximum level of 6.20 and ROE reached a maximum level of 44.93.

Financials: The company has a financial strength of 5 out of 10. Cash-to-debt ratio is 0.12, at average levels of Deere & Co history. It is underperforming the sector that has an average level of 0.35. Interest Coverage is 8.23 at same levels of the Industry median that is 8.46.

Growth: Over the last five years, the company had a steady and strong growth rate (per share).

All the above ratios have declined in the last 12 months. Revenue -1.9%, EBITDA -8.20%, EPS -14.20%.

Price: The stock is trading at $90.26 and is testing an upward trend that started on October 2007. Technically there is a resistance that now works as a support at the level of $90.

Currently, the price is down 5% from its 52-week high and up 14% from its 52-week low.

The stock looks undervalued at current prices. The Peter Lynch Value gives a price of $129 with a margin of safety of 30%, the DCF model gives a price of $147 with a margin of safety of 39%. The GuruFocus Fair Value Votes, after 57 votes, gives an average price of $124 with a margin of safety of 27%

Dividend Yield: DE has a dividend yield of 2.56% with a growth rate of 16.00% over the last 5 years

Gurus & Insiders : According to Guru Focus, Deere & Co. is held by Top Guru Warren Buffett that holds 4.97% of shares Outstanding, followed by Jean-Marie Eveillard (1.32% of Outstanding Shares) and Brian Rogers (0.73% of Outstanding Shares).

Over the last quarter, Warren Buffett, Jean-Marie Eveillard, Jim Simons and Joel Greenblatt increased their stakes, while Bestinfond (Trades, Portfolio) and Paul Tudor Jones reduced their positions by 27% and 41%. Jeremy Grantham and Tom Russo sold their shares.

In February 2015, the Pres. Ag & Turf Div. Eur., Asia, Afr., Von Pentz Markwart and Pres. Ag. & Turf Division, Field James M. sold some of their shares.