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AGCO Corp Scales 52-Week High: What's Driving the Stock?

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On Dec 18, AGCO Corporation (AGCO - Free Report) crafted a 52-week high of $75.95 during intra-day trading, finally closing lower at $74.96.

AGCO has a market cap of around $6 billion. The average volume of shares traded over the last three months is approximately 688K. Also, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive earnings surprise of 31.71%.

Investors are optimistic on this Zacks Rank #3 (Hold) company’s focus on strategic investments, expansion of product lines and acquisitions.

AGCO Corporation Price and Consensus

 

AGCO Corporation Price and Consensus | AGCO Corporation Quote

Even though the stock underperformed the industry with respect to share price movement, it exceeded the S&P 500 index’s gain over the past year. The stock has rallied 28.4% in a year’s time, higher than the S&P 500’s gain of 18.1% but fall behind the industry’s growth of 40.7% during the same time frame.

 



 

What's Driving AGCO?

In the third-quarter conference call, AGCO raised its net sales guidance to approximately $8.2 billion for 2017. The improved guidance indicates enhanced sales volumes, positive pricing, as well as acquisition and foreign exchange impacts. Notably, the company continues to make strategic investments in order to refresh and expand its product lines, upgrade system capabilities, and improve factory productivity.

In September, the company rolled out an innovative combine harvester — IDEAL — in Breganze, Italy, which is expected to strengthen its global harvesting offering and boost the full line of agricultural solutions. AGCO also announced the expansion of its parts distribution center in Regina, Saskatchewan, in a bid to facilitate faster parts delivery to customers in Western Canada.  The expansion work will close by early 2018.

Further, AGCO’s latest digital partnership with The Climate Corporation — a subsidiary of Monsanto Company — will provide AGCO customers the option to connect with The Climate Corporation’s Climate FieldView platform.

AGCO recently completed two acquisitions. In September, it acquired Precision Planting — a leader in innovative planting technology. In October, AGCO purchased the forage division of Lely Group, which will significantly enhance AGCO’s hay and forage product line in Europe. The company also plans to acquire Kepler Weber. AGCO has not initiated the tender offer for the acquisition of this storage business in Brazil. These acquisitions are anticipated to drive the company’s growth.

Stocks to Consider

Better-ranked stocks in the same space include Caterpillar Inc. (CAT - Free Report) and Deere & Company (DE - Free Report) Both Caterpillar and Deere sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar has a long-term earnings growth rate of 10.3%. Its shares have been up 61.5% year to date.

Deere has a long-term earnings growth rate of 8.2%. Its shares have gained 49.5% during in the year so far.

Zacks Editor-in-Chief Goes "All In" on This Stock

Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.

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