AGCO

$AGCO Director De Lange Invests $750K Over Nine Months Amid Agricultural Equipment Slump, Betting on Long-Term Value Through Trade Tensions

05/07/2025 18:17

Director Bob De Lange of agricultural equipment manufacturer $AGCO (AGCO Corp) has recently purchased an additional $250,382 worth of company shares, continuing a consistent buying pattern that spans nine months and signals confidence in the company's long-term value despite numerous challenges facing the agricultural equipment industry. According to SEC filings from May 6, De Lange acquired 2,642 shares at an average price of $94.77. This marks his third significant purchase following previous acquisitions in November 2024 and August 2024, bringing his total investment since August 2024 to approximately $750,000. Notably, fellow director Michael Arnold also purchased approximately $158,000 worth of shares in August 2024. This latest insider purchase came immediately after AGCO reported its Q1 2025 results on May 1, which showed revenue of $2.05 billion (down 30% year-over-year) and net income of $8.7 million (down 94% from the same period last year). Earnings per share plummeted to $0.14 from $2.25 a year earlier. Despite these substantial declines, the company managed to exceed market expectations of $2.047 billion in revenue and $0.03 in EPS. AGCO's stock has experienced significant volatility over the past year. Starting from around $104 in June 2024, it declined to the low $90s by the end of 2024, briefly rebounded to $106 in January 2025, before plummeting to around $75 in early April 2025 amid escalating U.S.-China trade tensions and tariff issues. The stock has since recovered to the mid-$90s range. This stock decline correlates with broader challenges in the agricultural equipment sector. In early April 2025, the Trump administration's tariff announcements and China's retaliatory 34% tariffs hit U.S. farm equipment manufacturers particularly hard. Competitors such as Caterpillar, Deere & Company, and CNH Industrial all experienced similar downward pressure on their stock prices. Fortunately, the sector rebounded on April 9 when President Trump authorized a 90-day pause on his tariff plan, with AGCO shares rising 7.1% that day. Additionally, Citi Research upgraded AGCO to 'buy' on April 8 with a price target of $90, emphasizing the company's strong position in recovering markets with 65% exposure to Europe and South America. In July 2024, AGCO agreed to sell its Grain & Protein business for $700 million in an all-cash deal, expecting to incur a loss between $450 million and $475 million from the transaction. This move appears to be part of a strategy to focus on core operations and divest non-core assets. Currently, AGCO is addressing the challenging market environment through cost management, production strategy adjustments, and investments in high-margin growth areas. The company is particularly focused on precision agriculture and brand expansion, projecting full-year sales of $9.6 billion and earnings per share in the range of $4 to $4.50. Twelve financial institutions maintain an average price target of $104.75 for AGCO, suggesting an upside potential of approximately 11% from current levels. However, Bank of America lowered its price target to $87.50 on April 14 while maintaining a 'neutral' rating, and Baird downgraded AGCO from 'outperform' to 'neutral' in early March. Overall, Director De Lange's consistent share purchases suggest confidence that the current downturn in the agricultural equipment industry is temporary and that AGCO will recover in the long term. The timing of his most recent purchase—immediately following disappointing quarterly results—indicates that insiders remain optimistic about the company's long-term prospects despite short-term challenges.

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