Bookkeeping: Closing Agco (AG)

I am going to take this opportunity to sell the remaining 200 shares of Agco (AG) as the stock is up nearly 5% today. I initiated this position in mid November [Initiating Agco (AG) Position] and after doing very well in this name as the stock breached $70, gave up all those gains in the past few weeks. I am now exiting with a small gain (under $1000) overall.

Let me give you my thinking. I have been and continue to be an agricultural bull. I had loaded up on the fertilizer names early, and wanted to diversify across agriculture into some equipment names as well. In early October I began a position in CNH Global (CNH) after debating whether to go into Deere (DE), Agco (AG), or CNH Global (CNH). [Still Not Enough Agriculture Exposure - Adding a New Name: CNH Global (CNH)]. Then after yet another great report from Agco (AG) [Agco Reports a Great Quarter and Agricultural Bull Keeps Going] in late October, I decided to add that name a few weeks later. I still believe in this group, but the market seems to be very antsy, and I suppose any fears of global slowdown will push these stocks down, although I've mentioned many times, I believe agriculture is in its own secular bull market. But what I think, and what a panicked market thinks are 2 very different things.

Since the CNH Global report [Closing Last of CNH Global] early this week, Agco has been suffering collateral damage. With earnings 2 weeks from now for Agco, and an antsy market I don't really want to hold this name into an earnings report, and make a small gain turn into a loss. So despite the very good valuations in this group, I am going to stand aside for now and re-assess. I like the fertilizer names far more than the equipment names because equipment has issues such as higher input costs (steel, petrol products, etc) that affect margins negatively, whereas the fertilizer names are simply immune to just about everything. So I might just concentrate on those names even though I like the whole space.

Again, I find nothing wrong with these equipment names, but the market is not treating them very well despite what I'd consider to be low valuations. As you can see, Agco (AG) trades below the 50 day moving average, and has not bounced much the past 2 days when many other names have put on very large moves. So I will put in this in the ever growing pile of "better safe than sorry" moves. Certainly Agco could post a great earnings, make all fears disappate and go up 20% in a blink of an eye in 2 weeks. But it could suffer the same fate as CNH Global as well. With the market being so moody I don't want to suffer the consequences of a 50/50 outcome; so I am exiting at this point and will re-assess at a later date.

I sold my last 200 shares in the mid $57s.

No positions