Huge numbers from Deere ( DE , quote ) last week have thrilled traders who already liked the stock and are having an impact across the mining equipment sector.
Emerging markets are still at the core of DE's outlook and current outperformance. The company's mining equipment operations have thrived and its traditional farm machinery side keeps selling well around the world.
For the year, they brought in a record $2.8 billion in profit. In 2012, they expect to see revenue climb 15% and earnings expand accordingly.
The single cloud on this horizon is probably higher credit loss provisions as DE prepares for some customers to default on their accounts.
Since the report, DE has handily outperformed the volatile broad market, climbing 10% since the Thanksgiving break. We expected this to spread to names like Joy Global ( JOYG , quote ) and even Caterpillar ( CAT , quote ), and JOYG's 16% spike speaks for itself.
For broader emerging markets investors, this demonstrates that countries like China and India are still buying big trucks and tractors to develop their land.
Giant infrastructure projects are still happening. Small farmers are still plowing and upgrading their equipment.
The food play in particular is alive and well.