Just yesterday the stock was hitting 6 mo highs. Today it’s eating gravel.
Via Briefing.com
CAT noted that 2016, overall, is similar to the second half of 2015. They have seen no big changes relative to the second half so they expect 2016 to follow their typical seasonal pattern of a weaker Q1 and Q3 and a stronger Q2 and Q4.
Oil and mining are the weakest businesses for the company. These businesses typically have the largest backlog for CAT, which speaks to the decline in their backlog.
In China, the company thinks that what is happening with their economy ‘makes sense.’ They do not think that you can drive an economy that big that fast with only fixed capital investments.
CAT is generally ‘okay’ with the shift to a consumer lead economy that the country is trying to make. That being said, they did note that demand has come down in China, although it seems to be stabilizing.
With CAT, a strengthening dollar impacts sales negatively but is typically a net neutral impact on profits as costs fall. The company does not expect for FX to have a material impact on profits Y/Y.
This stock deserves to be lower, if there is such a thing.
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Fly, as a man of principle I ask you, will the Fed be raising rates in March? Yes or Nahhh
I started a CAT position in Jan in the upper 50s, buying about 1/4 of where I want to be. A dog with, at the time, a 5+% dividend. I figured it would keep going down, but it stupidly went to the 70s. It’s a $50 stock, and just barely.