Saved by construction!
That's how I feel about the quarter from John Deere (DE), which was definitely a disappointment when it comes to sales of ag equipment, but not from the heavy Deere machines used to build things.
The ag orders here fell more than 20%, which normally would have led to a dramatic shortfall. But instead, the company blew the estimates away, in part because of tremendous execution but also because of an improvement in housing starts.
We all know the farmer in this country's been victimized by lower crop prices, and a JPMorgan (JPM) piece warning you off Deere earlier this week cited the dire straits of the industry.
All I can say is, I think people took a look at the earnings and decided, "If this company can make that much money with these punk sales, who knows how much it can make if things get better."
That wasn't the only surprise today. I was flummoxed by the weak numbers in Hewlett-Packard (HPQ), but people looked right through them and lapped the company's stock up because of the coming de-merger and the opportunities that abound for the enterprise business. I am circumspect, but I know break-ups are a powerful positive.
And Campbell (CPB) delivered another good number, in part because of Pepperidge Farm, which seems to have gotten its mojo back, and in part because of Bolthouse, its natural and organic division.
Keep in mind that today marks the second anniversary of the spinoff of WhiteWave (WWAV), the natural and organic division of Dean Foods (DF), and any acquirer would no longer face severe tax consequences if it made a bid for WWAV.
I say be ready, which we are in Action Alerts PLUS, as it is a very big position for the charitable trust. I never recommend a stock on a takeover basis if the fundamentals are in decline, but that's anything but the case in WhiteWave's situation.