Can’t believe there isn’t a Caterpillar Inc thread. Am I missing it?
It’s a stock I have been looking at the last couple of weeks but I just have this feeling sales are going to be slammed in next couple of years and will be one of slowest markets to recover (Heavy plant and machinery).
Anyone got any thought?
Existing shareholders, what’s the bulk thesis?
I own CAT, there was a 2.2 Trillion Infrastructure Bill passed last month in the US which Caterpillar are likely to profit from massively when the economy kickstarts again.
They are also massively into 3D Printing Technology, something for future tech.
Also, when you look at the broader S&P they are one of the few fair valued companies imo. They do come with risk but with debt, but I’m happy to hold.
Hi Jamie,
That’s a good point regarding the infrastructure bill. They’re so strong in home market. Not sure what’s in the basket of infrastructure. Might take a look.
My number 1 concern is that their customers will cut capex indiscriminately to save costs for next years to recover from virus shut down and they were already at top of the cycle and on way down. I just see rough waters for next 2-3 years.
Their PE ratio looks attractive but not their shiller PE which is strange.
Also agree debt is high and they provide loans to their customers which is double jeopardy to me as they exposed to credit default on top of debt.
I was looking to get my lad some shares for his junior ISA (he’d love that when he’s a bit older, daughter has some Disney) but I can’t justify it unless their down to $70 or less
There are a lot of threads missing (e.g. I’m afraid we are not talking about all the FTSE 100 constituents yet).
Caterpillar is interesting because it’s viewed as a bellwether of global industrial health. So, if there is a bull market again, the stock should do well.
It’s also a dividend aristocrat, growing dividends for 26 years now.
SimplyWallSt gives the Caterpillar stock a chunky fair value:
I dont trust simply wall streets calculations on cyclical companies as analyst estimates they use tend to be optimistic and not see the downtrend and underestimate the cycle impact.
They announced the dividend is being maintained so that’s a sign of confidence in themselves
I put my thoughts into a video with a relative and intrinsic valuation:
If you have a few minutes spare, take a look
