# Caterpillar (CAT)



## Jungle (Feb 17, 2010)

I kept reading about this one being rated a "buy," good target price, etc. Now they blew the doors off expectations with latest quarter and yearly guidance. 

Anyone own this one? Thoughts or opinions?


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## donald (Apr 18, 2011)

I own this-It's been a insane ride!This stock came close to dipping into the high 60s in that late summer early fall decline....last i checked today it's 112!If thats not hot im not sure what is......Being in the construction industry and wanting a longterm play in the industrial sector(there equipnment is the ****,not even a contest with deere imo)I fully realize this stock is cyclical....I'm wondering if anybody likes it here(im guessing its overbought?)But then again if the us strengthens maybe not,there forecasting great things....


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## Argonaut (Dec 7, 2010)

I used to watch for this one on the scrolling ticker back when nobody had internet and I was not yet a teenager. The symbol, CAT, was the coolest I felt, and I knew what Caterpillar machines were so I liked it. This was probably better logic than that of most analysts today.

Fast forward to 2012, and my thoughts haven't changed. It's a top 5 US stock, and I would love to buy it when close to 52 week lows. I'm not really a value investor, but cyclical stocks like CAT are good ones to look for lower entry points.


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## peterk (May 16, 2010)

Bought at $80 last summer. Considering getting out if it runs up much higher. Yield is down to 1.6% now which is quite low.


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## PMREdmonton (Apr 6, 2009)

I bought in around 75 but only for 50 shares. I should have bought more but I've only been buying individual stocks for less than a year and had only been buying for about 5 months when I made that buy. In retrospect I really liked the stock and should have bought at least 100. Buffet has said that you should wait for the fat pitch and then smack it out of the park well that was the fat pitch. I still like the stock so I won't sell here (let your winners run) but I'm not sure I want to add right now either.

The one industrial I"m thinking about buying right now is Cummins (CMI). I think it is still pretty undervalued despite its run up and would like to buy some.


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## donald (Apr 18, 2011)

Anybody have any thoughts on (lmt)lockhead martin in this space as a industrial?There earnings were not good but boy they are cash rich and looks like they can carry the dividend for awaile yield is high(paid while waiting)i know the us defence budget is getting cut short term but maybe this is a fat pitch looking back in a couple yrs?


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## Jungle (Feb 17, 2010)

Whoa Cat is closing that Electro Motive plant in London because the union will not take a 50% cut in wage. 

Out with unions! Finally this is a revolution starting. 
And I appoligize if anyone lost their job - no hard feelings against you personally, I just don't like unions.


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## doctrine (Sep 30, 2011)

Got to laugh at people claiming jobs are moving overseas. They're actually just moving to Indiana, where the fairly large unemployed US work force is more than willing to work for $18/hour. If Americans are willing to work the same manufacturing job for half the wages, there's not much you can do.


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## Barwelle (Feb 23, 2011)

Jungle said:


> Whoa Cat is closing that Electro Motive plant in London because the union will not take a 50% cut in wage.
> 
> Out with unions! Finally this is a revolution starting.


I'm usually not a fan of unions either.

But I feel a bit different about this one. It's a double kick to the teeth for these workers... it's not even like with the auto unions in 08-09 where the Big Three were losing money.

CAT is doing very well for itself lately, and yet they reward the people who did the actual work that makes them money by ditching them. It's nice for the workers in Indiana, but they'll never come close to making the same money that these guys did.

Meanwhile, the execs at the top will get a bonus for pulling out the rug under the 450 workers in London.

The rich get richer...


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## GreenAvenue (Dec 28, 2011)

Barwelle said:


> The rich get richer...


Of course, a company needs to make a profit. If CAT can make 10 million in Canada but 110 million in the USA what would you choose? The U.S. economy has been far worse for a long time and someone had to make a change. Don't blame the rich, blame the current administration.


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## PMREdmonton (Apr 6, 2009)

Barwelle said:


> I'm usually not a fan of unions either.
> 
> But I feel a bit different about this one. It's a double kick to the teeth for these workers... it's not even like with the auto unions in 08-09 where the Big Three were losing money.
> 
> ...


This is the new world order. Semi-skilled workers cannot get large salaries anymore because there is excess labor supply available right now in the USA. Manufacturers which wish to have North American footprint will move to the US for labor costs are 50% less. 

If the Canadian workers do not give in more their jobs will be permanently lost with no hopes of future employment in the manufacturing sector.


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## Barwelle (Feb 23, 2011)

I should have said, the rich get richer, while the middle class loses its footing and slides into poverty.

My problem with this is that the gap between the rich and the poor continues to grow.

I know my ideas are flawed... yes, there has to be a money incentive for a company to continue operating in this system. But it's the ethics of the whole thing that bothers me. If CAT was losing money in London, I would feel differently, but I don't think they were.


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## PMREdmonton (Apr 6, 2009)

Barwelle said:


> I should have said, the rich get richer, while the middle class loses its footing and slides into poverty.
> 
> My problem with this is that the gap between the rich and the poor continues to grow.
> 
> I know my ideas are flawed... yes, there has to be a money incentive for a company to continue operating in this system. But it's the ethics of the whole thing that bothers me. If CAT was losing money in London, I would feel differently, but I don't think they were.


CAT is responsible to its shareholders, not the people of London. If they can make more profit by switching operations to Indiana then that is what they will do. It is not a question of whether profit exists, it is a question of maximizing profitability in the long run.

I suggest the London workers negotitate a 30-40% clawback on wages and accept the offer for their own good as well as the good of the community in which they live.


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## dubmac (Jan 9, 2011)

I'm left wondering how many other US (or other foreign) companies will do the same. Much of the decision is likely based on the fact that so many US workers are looking for jobs and will gladly work for less than an equivalent employee here. At the risk of sounding cynical, I wonder whether the company would negotiate at all.


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## officematt (Oct 16, 2011)

PMREdmonton said:


> This is the new world order. Semi-skilled workers cannot get large salaries anymore because there is excess labor supply available right now in the USA.


Tell me this: When did semi-skilled labourers ever deserve large salaries? That's the whole problem with the competitiveness of this country.


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## Jungle (Feb 17, 2010)

In a statement by CAT, they said this:

“The cost structure of the operation was not sustainable and efforts to negotiate a new, competitive collective agreement were not successful,”

http://www.theglobeandmail.com/globe-investor/caterpillar-pulls-plug-on-london-plant/article2325356/


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## doctrine (Sep 30, 2011)

If CAT doesn't move to Indiana, then they put their shareholders at risk. With higher costs, their competitors can undercut them. Those 450 workers have been sent an economic message that they couldn't be employed effectively in the world economy. Personally, they should take this opportunity to either learn new skills, start their own business or move to Alberta.


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## bootsie (Aug 30, 2010)

Friend worked for CAT a few years back, awful company - they proved it again - sadly ,others do this as well they are blatant a-holes is all

The execs will get nice bonuses and when 15 dollars is too much they will move to alabama - 

Race to the bottom exempified


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## Uranium101 (Nov 18, 2011)

How much does your friend makes an hour at CAT?


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## donald (Apr 18, 2011)

I find it funny that most of us here are investors and we rely on are investments for retirement/building net worth ect & we all seek out and study companies.

This is the capital markets,why is everyone thinking caterpillar is some evil corporation?are they the first company to close down a plant?I happen to have a small stake and i am happy as a investor in the company that they are cost cutting and back re investing in the states(stock was up over 3% friday)not sure if this even registers for the "street" but something tells me it's positive.

Is'nt this business 101?this isn't 1950.....the world is not fair-never will be-sh$t happens.I feel very bad for the families that are affected.I own shares in freeport mcmaron and lost over 25% due to a union squeezing them this last summer,you think if it was reversed and i was complaining a strong union was bullying the shareholders and they(shareholders) losing thousands- anyone would have sympathy for shareholders?Cat is competing in a tough sector and have deere/joy global ect breathing down there neck-management had to do what they had to do,not trying to be a di8k with m.o but since when is corporate america fair?or for that matter life?


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## Argonaut (Dec 7, 2010)

If you wanted to order a cooking pot online, and the same model was $50 on eBay, and $25 on Amazon.. where would you order it?

CAT is in the right here. The free market speaks.


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## Uranium101 (Nov 18, 2011)

donald said:


> I find it funny that most of us here are investors and we rely on are investments for retirement/building net worth ect & we all seek out and study companies.
> 
> This is the capital markets,why is everyone thinking caterpillar is some evil corporation?are they the first company to close down a plant?I happen to have a small stake and i am happy as a investor in the company that they are cost cutting and back re investing in the states(stock was up over 3% friday)not sure if this even registers for the "street" but something tells me it's positive.
> 
> Is'nt this business 101?this isn't 1950.....the world is not fair-never will be-sh$t happens.I feel very bad for the families that are affected.I own shares in freeport mcmaron and lost over 25% due to a union squeezing them this last summer,you think if it was reversed and i was complaining a strong union was bullying the shareholders and they(shareholders) losing thousands- anyone would have sympathy for shareholders?Cat is competing in a tough sector and have deere/joy global ect breathing down there neck-management had to do what they had to do,not trying to be a di8k with m.o but since when is corporate america fair?or for that matter life?


I agree, The Americans are waking up why can't we?
I mean, the unions have lost their sole purpose for existence.
Back in the days where employers treated their employees like dogs, unions were created to fight back.
Unions were very cooperative back then. they even work closely with employers to help them survive the bad times.
What do we have now? unions just want more wage, more benefits, less work, what else? Of course, there are exceptions. I know someone just want to do their jobs and earn a living, not the majority though.

The world of business will re-establish balance once again. Less power to the unions and more power to the employers. Once the employers are out of control, then the trend will be reversed. This has happened many times in the past, and it will continue to do so. We are just too young to realize.

People who disagree may be those being part of an union or related. As for the rest of us, we have seem enough union power for our life time.
I mean, what is bankable sick days? (not CAT related, it was the garbage men in Ontario)


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## buhhy (Nov 23, 2011)

Argonaut said:


> If you wanted to order a cooking pot online, and the same model was $50 on eBay, and $25 on Amazon.. where would you order it?
> 
> CAT is in the right here. The free market speaks.


Haha, that's funny, usually eBay is cheaper than Amazon. Providing you don't mind buying it from HongKong.


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## MrMatt (Dec 21, 2011)

Barwelle said:


> I should have said, the rich get richer, while the middle class loses its footing and slides into poverty.
> 
> My problem with this is that the gap between the rich and the poor continues to grow.
> 
> I know my ideas are flawed... yes, there has to be a money incentive for a company to continue operating in this system. But it's the ethics of the whole thing that bothers me. If CAT was losing money in London, I would feel differently, but I don't think they were.


Electromotive was pretty much break even AFAIK. 

The offer wasn't a 50% salary cut from any published numbers I saw, lots of the details have been pulled, but I have section that I emailed out. 
""
The offer to Electro-Motive employees would see production jobs range
from $16.50 to $22 per hour. Skilled trades jobs would earn a flat $34,
but the 30 or so of those employees were making $38 under the old
contract.
Testers would be paid far below their Erie counterparts at just $22 per
hour. They were making $38.
Many others making around $28 on the old contract would see that reduced
to $22.
"""

FYI The Erie counterparts are for a GE (competitor plant)
The big one is cutting of benefits, and they had some good ones.

I think the employees were pawns in this, I hope they get decent severence.
CAT never had any real intention of keeping the plant there.
Muncie has estimated real unemployment of >20%, is in a right to work state, plus millions in subsidies.
The CAW leadership knew they were going, so they took a stand. They would have had to compromise too much, which would make every subsequent contract negotiation absolutely BRUTAL.


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## topdog (Feb 5, 2012)

*I call it Competition*



Jungle said:


> Whoa Cat is closing that Electro Motive plant in London because the union will not take a 50% cut in wage.
> 
> Out with unions! Finally this is a revolution starting.
> And I appoligize if anyone lost their job - no hard feelings against you personally, I just don't like unions.



I follow CAT because I own shares of Finning FTE there CAT distributor. 

They have been up down like a yo-yo too. 

As far as CAT shutting down a plant in Canada if we cannot compete with our neigbour/bully to the south we have to change the way we do business. that means the unions have to change too. Threats don't work companies have other options!!!


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## moneyisfornothing (Feb 18, 2012)

*caterpillar*

getting to 100 bux area.
anyone in?:hopelessness:


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## KaeJS (Sep 28, 2010)

Still too expensive. $100 isn't cheap.

Maybe if it was $80.


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## moneyisfornothing (Feb 18, 2012)

KaeJS said:


> Still too expensive. $100 isn't cheap.
> 
> Maybe if it was $80.


would luv to see at 80 bux.......
it might if the mkt colapses.
100 bux is pivotal nevertheless.
i posted that i might enter a trade at 100 bux.
tomorrow may be the day
and i will add that u will see the price u mentioned only with a mkt colapse.


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## KaeJS (Sep 28, 2010)

We will see. 

You made me look at the chart now, lol.

You might be right. $80 is really cheap. I don't follow this stock too often as it's usually out of my price range. Gotta drop $10k to make any profit...


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## moneyisfornothing (Feb 18, 2012)

the chart is a good indication.
the price has no relevance when u trade even though u buy less shares.
what has relevance is the fact that this is one of the companies holding the spx 500 at this levels.
it is a bellwether , a real one .
the spx 500 is trading at a very rich level , but so far the mkt has been dictating those levels.
i looked at ur portfolio and sometimes , trading one stock at a time has more meaning than many stocks.
50k is 500 shares of cat give it or take.
do ur own DD.
cheers and GL
p.s balsy moves on gold though.... good luck anyway:encouragement:


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## KaeJS (Sep 28, 2010)

moneyisfornothing said:


> *50k is 500 shares of cat give it or take.*
> do ur own DD.
> cheers and GL
> *p.s balsy moves on gold though.... good luck anyway*:encouragement:


Understood. :wink:

And thank you. Hopefully it was ballsy and not a mistake. :tongue:


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## moneyisfornothing (Feb 18, 2012)

KaeJS said:


> Understood. :wink:
> 
> And thank you. Hopefully it was ballsy and not a mistake. :tongue:


first position on cat


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## moneyisfornothing (Feb 18, 2012)

moneyisfornothing said:


> first position on cat




and...........sold


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## Dopplegangerr (Sep 3, 2011)

This stock is becoming affordable again, anyone else still watching CAT? 
PE of 11, Yield of 2.1


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## KaeJS (Sep 28, 2010)

I'm in at $91.04.

A little bit on the high side, but I didn't expect markets to tank this badly. I thought $85 might be possible, but now that $85 has been hit, I'm starting to think $80 is feasible (like I have said above).

Hate myself for not listening to myself!


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## PMREdmonton (Apr 6, 2009)

I bought CAT in the summer sell-off at about 70 and then eventually sold it off at 110 for a nice 60% gain over about 5 months.

I still think CAT is a solid play on the coming infrastructure boom that is happening in non-Chinese emerging markets as well as the need for major repairs or upgrades in infrastructure in the developed world. Onto that you can add all the machinery now needed for modern mining and oil drilling. Throw in their old roots in basic construction and I think the company's future will be very bright.

The problem with CAT is that it is very volatile so it goes up and down like a yoyo so this is not a buy and hold stock like PG, KO, PEP, KFT, TD, BCE, etc. One issue is the volatility and the other is the yield is too low. So if you buy this one you should also decide when you want to get out both on the downside and then the upside. If I bought I would not sell it no matter how much it swooned unless something fundamentally changed about the company. I think the price I sold at 110-120 would still be a good exit point.


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## KaeJS (Sep 28, 2010)

PMREdmonton said:


> I
> The problem with CAT is that it is very volatile so it goes up and down like a yoyo so this is not a buy and hold stock like PG, KO, PEP, KFT, TD, BCE, etc. One issue is the volatility and the other is the yield is too low. So if you buy this one you should also decide when you want to get out both on the downside and then the upside. If I bought I would not sell it no matter how much it swooned unless something fundamentally changed about the company. I think the price I sold at 110-120 would still be a good exit point.


^ I couldn't agree more.

Congratulations on your nice trade, PMR.

However, I don't think I would be able to hold it much past $100. I would probably be a seller at $100... Yield really is too low, but I love the volatility.


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## PMREdmonton (Apr 6, 2009)

Yes, volatility can be your friend so long as you don't let it spook you out of a good and undervalued company if you happen to bite early and "catch a falling knife". CAT is a great company and will be the world leader in a growing field for the forseeable future so I don't really see much risk buying at these prices. Just don't sell it. If it falls further and you have the funds I'd suggest doubling down if you believe in your position. I did this with CTW (Catch the Wind) and got ridiculed numerous times by HP but I lowered my ACB from 13.5 cents to 10 cents and now am up 55% on my position because I was confident in the company and its value compared to its market cap and that was a much shakier play than CAT. There was that famous private investor who had a long history of 15-20% gains over decades of investing (Walter Schloss, I think) who was a famous value investor who said he made most of his returns of buying falling knives when they represented value and then doubling down if they fell down further.

Of course, you can get pounded with this approach, too. Right now I am really taking it on the chin with GFS which is at 4.00 right now but I have ACB of a little over 6 after multiple tranches bought during dips. I still like this company and its product and think the company will turn around later this year. Fracking is just simply needed due to geopolitical risk and the need for fossil fuels but we also need water and don't want to have to deal with the toxic brine that comes up to the surface and GFS gets rid of all of this and may increase EUR by 25-30%. I really believe the stock is in an extreme state of market pessimism due to previous management over-promising the technology adoption cycle.

I've had my eye on CAT. I still hope to grab some around 80 or perhaps sell a put if it drops a bit more.


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## snowbird (Jun 14, 2012)

Anyone watching CAT? It has been on my watchlist and has come down to $86.50 today....might be an entry point for me


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## none (Jan 15, 2013)

My 2 year old really wants me to buy this stock.


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## Jungle (Feb 17, 2010)

What a dog. Hopefully things pick up but it doesn't look rosey in the near future.


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## Hawkdog (Oct 26, 2012)

He is an article on CAT - i read this today, doesn't sound good.
http://www.ibtimes.com/caterpillar-...falls-sluggish-mining-demand-1434802?ft=c29d1


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## Jon_Snow (May 20, 2009)

When CAT gets into the 70's I start feeling mighty interested. This is great trading stock.


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## My Own Advisor (Sep 24, 2012)

You an owner Jungle? I've considered this one...


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## donald (Apr 18, 2011)

I own this dog also,been a dog for about 2 years now,i like the company and i like the dividend growth rate ect but i have learned also that this stock is a trading stock(like all cyclicals)This stock swings 20/30 $ in the cycle it is in,this stock looks cheap here though.I bought this thing in 2011 @ the exact worst time-111.00 and have been feeling the pain ever since but i want long term exposure in this sector(without trying to time) so in my over all game plan it is fine for now.(made a bad buy though when i did)


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