Price Check Price trends

[orangebluegreen]

Interesting 5yr chart.
http://finance.yahoo.com/q/bc?s=DE&t=5y&l=on&z=m&q=l&c=kub

Will this trend continue or will the new JD’s reverse the trend? If Kubota doesn’t have any new B’s, the JD 2520/2320 may bite into that area. Then again, in my opinion JD’s pricing being higher than KUB’s may bring even more buyers to KUB if the economy were to slow. Reading recent reports shows JD smaller tractor sales dropping while KUB’s have increased. This is documented in some of my other posts I’m too lazy to dig up.

I just looked at a few of the basic ratios of growth vs. earnings, market cap vs. earnings, etc and find both companies priced relatively evenly, though perhaps value oriented compared to the majority of companies out there. I didn’t do a thorough look, just a quickie, didn’t look at debt, etc, there are many other points to consider in valuing the two companies against each other. Obviously dependant on the economy, and with interest rates rising and the excesses in real estate pricing now breaking IMO, could be they keep a low PE. I’ve not analyzed how these companies perform in slow-downs of the economy, if the agricultural needs make them a haven for institutional money, or do they take a hit because farmers decide to keep the old equipment another year or so?

There is only one analysts covering KUB compared to 15 on DE so it’s not a great comparison, but Yahoo shows JD’s estimated “current quarter 05” estimates as being reduced by a large margin compared to the estimate of 90 days ago (44% drop) . They also show expected growth next yr for JD at 10.7% vs. KUB 14.2%. Have to take into consideration subsidiaries in that. A caveat about analyst’s projections...they brought us the .com bubble and Enron.


http://finance.yahoo.com/q/ae?s=DE

http://finance.yahoo.com/q/ae?s=KUB

 

[SkyPup]

Kubota originally moved in where International Harvester left off due to good management taking advantage of dubious management, kind of like GM and Toyota.

 

[maryos]

My apologies: I should have made the title of the thread more clear - I am interested in prices of Kubota tractors, whether these have been increasing and whether Kubota tractors are more expensive than other makes (if so, why? are they more fuel efficient?) I can see that I may have confused the issue in my second post.

I know that Kubota hosts a convention every November and uses this to introduce new models. I had imagined that new models would be much more expensive than previous ones. But apparently this is not the case (indicated by earlier response).

Thank you for your interesting response, nevertheless - I'm now off to check those Yahoo charts.

Mary

 

[orangebluegreen]

Mary, my apologies to you, I should have made more clear my response was to skypup, although I assumed it would be clear since it was linked off his post.

IMO if sales are falling off, which they have due to many factors including economy, CUT buyer saturation, drought and probably a hundred other reasons, then one would assume prices would drop to follow the drop in sales. This however appears to be regional and depends on equipment size. The smaller under 40HP tractors have fallen off more than the larger. In my own looking since this summer, I’ve seen a decrease of roughly 10% since June’s advertised pricing. Obviously prices peak at that time of year so it still remains to be seen if we are in an extended down turn. One thing that gives tractor manufacturers a pricing advantage is they do not place a year on any given tractor, so it can sit on a lot for years and be sold as new. As to asking if the future or past will be up or down....good luck. Assuming many posters here are probably dealers, I wouldn’t expect them to say anyone will soon be begging you to buy. Perhaps try calling your dealer and ask him if prices are going down?
http://www.aem.org/Trends/USAg/

 

[maryos]

Thank you - that is clear now, my mistake, sorry. Thanks for interesting link too.

I suppose what I am interested in knowing is whether Kubota has pricing power relative to other brands. so whether Kubota is keeping prices higher, or at least offering less in the way of financing incentives, on the basis that their models are better quality, more efficient... etc. I believe this is the case for Deere, for instance. just not sure about Kubota.

I also notice that Kubota has become much more widespread in recent years - seems to be taking market share. I am writing from UK where even here Kubota tractors are now quite usual (at the <40 hp end). Yet looking on the web it does not seem that their models are particularly cheap; in fact they seem to be at the high end, price-wise (I am not sure if they are at the high end across all the product range, or just on specific models).

Also, I wonder how dealers determine the price; presumably there is a recommended retail price for each model, but the dealers will have some discretion in what profit they choose to make from the wholesale price? (I am interested in how it works for the US dealers)

This is a very interesting site - perhaps if I browse it some more, I will find more answers to the above questions...!

Thanks again,

Mary