$57.60
-0.39 (-0.67%)
Caterpillar, Inc. (CAT)
CAPS Rating:
The company is engaged in construction & mining equipment, diesel & natural gas engines and industrial gas turbines in its size range. It operates in 3 principal lines of business: Machinery, Engines and Financial Products.
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Euphoria over government infrastructure will fall off... additionally there is plenty of idle construction equipment... the world doesn't need a lot more construction tools over the near term
Well run company, huge installed base that needs parts. They may downsize, but look good to me at these levels.
Of course I should qualify and say NWL looked good as well.
in 2005 CAT made only 30% less than it made in 2007... I think 2009 will not be as good as 2005 was so CAT is not cheap yet...OH BY THE WAY THIS WELL RUN COMPANY HAS $34B in debt.... the current cost of capital for corporations is MUCH MUCH higher than recent history so any future debt roll overs for CAT could be very costly to earnings.
I am surprised NWL is doing so poorly btw TDRH
I'm not too terribly surprised by NWL. They have fairly high leverage and "Goodwill" accounts for 42% of their total assets. In fact, "Goodwill" is larger than their total shareholders' equity. If you were to totally discount their Goodwill, assign them a fairly high cost of capital, and then run a DCF, you can come fairly close to the current price. Plus, they don't really have much in the way of growth prospects - in fact, I'd worry about some of their brands coming under pressure. If I had to wager, I'd say they are slightly undervalued, but not terribly so.