CAT
Caterpillar Inc.
Industrial/Transportation
10/14/2014
Presented
| Date | 10/09/2014 |
| Price | $93.13 |
| Market Cap | $58.50B |
| Ent Value | $92.17B |
| P/E Ratio | 14.12x |
| Book Value | $27.63 |
| Div Yield | 3.4% |
| Shares O/S | 627.85M |
| Ave Daily Vol | 4,390,000 |
| Short Int | 3.54% |
Current
| Price | $387.99 |
| Market Cap | $188.14B |
| Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The companys Construction Industries segment offers backhoe, small wheel, skid steer, multi-terrain, compact track, medium and compact wheel, and track-type loaders; mini, wheel, and track excavators; track-type tractors; and select work tools, motor graders, telehandlers, soil compactors, and pipelayers, as well as its related parts for the heavy and general construction, rental, mining and quarry, and aggregates markets. Its Resource Industries segment provides electric rope and hydraulic shovels; draglines; drills; highwall and longwall miners; hard rock vehicles; articulated, large mining, and off-highway trucks; large wheel loaders; wheel tractor scrapers; wheel dozers; machinery components; and electronics and control systems for use in mining and quarry applications. The companys Energy & Transportation segment offers reciprocating engines; reciprocating engine powered generator sets; integrated systems and solutions for the electric power generation industry; and turbines and its related services, centrifugal gas compressors, diesel-electric locomotives and components, and rail-related products and services. Its Financial Products segment provides retail and wholesale financing primarily for Caterpillar equipment, machinery, and engines; offers property, casualty, life, accident, and health insurance; insurance brokerage services; and purchases short-term trade receivables. The companys All Other segments remanufactures engines and components; provides business strategy, and development, management, manufacturing, marketing, and support primarily for paving, forestry, industrial, waste, and Cat products. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Peoria, Illinois. |
Publicly traded companies mentioned herein: Caterpillar Inc (CAT), National Oilwell Varco (NOV)
Highlights
Shares of Caterpillar (CAT) had outperformed the market over the first half of 2014, but since peaking in July at ~$111, they are down ~16%. The presenter is short, and believes the basis for the bearish position is rather straight forward. While the mining business appears to have bottomed and construction is likely to remain flat due to North American activity, CAT faces tough comps in Japan and Brazil, and “no other geography is helping (Europe is flat).” CAT’s energy-related business is driven by the sale of good products such as engines for pipelines, but by management’s own admission this business may be peaking. Overall, he sees the potential for negative earnings revisions over the next 2-2.5 years, and thinks the cyclical short setup “is great.”
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