Last week, AGCO Corp. (AGCO) reported third-quarter results. The company posted earnings of 13 cents per share, compared $1.01 per share in the prior-year quarter. The significant decline in quarterly earnings was driven by lower sales volumes, weaker product mix and the negative impact of currency translation. Net sales in the quarter were $1,403.7 million, down 32.7% compared to the third quarter of 2008. AGCO is experiencing soft demand conditions in most of its markets. Lower commodity prices, along with expectations of decreased farm income, are hampering investments in farm equipment around the world. AGCO is aggressively cutting production in order to reduce its own and dealer’s inventories. Sales in North America were down 31.9% on a constant currency basis due to weaker sales of low horsepower tractors and hay products, as well as reduction in dealer inventory. Unit retail sales of lower horsepower tractors were ...

AGCO Corp.’s (AGCO) MACD indicator has entered into bearish territory with a reading of -0.5462. The Zacks #4 Rank (“Sell") stock has declined slightly to $28.22 in afternoon trade. The full-year Zacks Consensus Estimate has moved down by 45 cents over the past week to $1.57 per share."AGCO" Free Stock Analysis: Buy? Sell? Hold?Zacks Investment Research

AGCO Corp. (AGCO) reported second-quarter earnings of $0.64 per share, above market expectations of $0.55. EPS results were down 52.2% year over year due to deteriorating demand for agricultural equipment in all the major markets and increase in engineering expenses.   Net sales in the quarter were $1,579.0 million, down 34%, compared to the second quarter of 2008. AGCO is experiencing soft demand conditions in the most of its markets. Sales in North America were down 4.3% as weaker sales of lower horsepower tractors more than offset strong sales of high horsepower tractors, balers and implements.

Unit retail sales of lower horsepower tractors were down due to weakness in the landscaping, residential construction, and dairy sectors. This weakness is expected to continue for the remainder of the year.   In the EAME region, quarterly sales were down 28.0% due to lower volumes in Eastern and Central Europe, Russia, Scandinavia and

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Smart Money Betting on Heavy Machinery Stocks Gaining in 2009

Joe Kunkle, The Investment U Research Team

One of the greatest assets you can have as a trader or investor is having the ability to spot trends, and use that information to draw conclusions about what will occur in the future.

I have long used the options market as a way of watching where the “smart money” is making bets. It has allowed me to foresee the collapse of financial stocks and the re-emergence of oil and commodity related stocks.

And from the signals I’m seeing, we may be on the verge of another big move.

Over the past few weeks, large volume bullish option trades have been indicating the expectation for a major recovery in heavy machinery stocks for the third quarter of 2009.

But we can’t really understand the significance of these

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AGCO Corp. (AG) reported second quarter EPS of $1.34, above our estimate at $0.90, due to a smaller-than-expected loss in North America and continued robust growth in South America and the EMEA [Europe, Middle East and Africa] region. The sales growth was broad-based, with every geographic region posting a double-digit sales increase. The growth in commercial farm income and acreage is driving demand for high-horsepower tractors.

While North America reported a loss, we expect a second half profit recovery on the back of favorable currency translation, higher margins, and double-digit sales growth. Our target price is $57, based on around 14.7x our 2008 EPS estimate of $3.87

Despite the managementÂ’s cautious EPS forecast of $3.60 to $3.70 for 2008, we believe there are several long-term trends that point to higher earnings growth. The first promising trend centers on the likelihood of greater demand for combines in North America as a

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