Any One Have Any Thoughts on CAT

Well... It never quite got to 70 and here we are at 57 ....

Anyway, I think it's a value play at the 50 dollar level


I don't play individual stocks any more but this one would be on my risky but interesting list.
 
I have some, too much really and I held onto it all the way down, the dividend is smoothing my negative thoughts for now.

I might sell some, grab something else, and buy back in after harvesting the capital loss, but not so sure when things are so volatile.
 
My male hormonal twinge is still there - for a few good stocks.

But - I looked at the wife and she looked at me and excess after tax RMD is going toward some remodeling on our 1922 Craftsman bungalow.

heh heh heh - so may sell one or two of the 5 I have left and switch. But the holding period, 10-15 years has been so long there are cap gains to pay even on the dogs. :confused:
 
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Sunset said:
I have some, too much really and I held onto it all the way down, the dividend is smoothing my negative thoughts for now.

I might sell some, grab something else, and buy back in after harvesting the capital loss, but not so sure when things are so volatile.
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I do not know what is the best thing for you to do, but if you had waited for 60 to buy the stock, and now held it would you be considering selling? Selling for only tax reasons are decisions that never enter my investing mind, in the long term the short term fluctuations of price are not as important as outlook for the company, dividends and changes from my original thinking. None of this from what I can see has changed for CAT other than the stock price, which is not a reason to sell unless watching the price drop to 40 or so would be very upsetting to you, then you should sell it as this is not a stock you should have purchased in the first place.
 
Running_Man said:
I do not know what is the best thing for you to do, but if you had waited for 60 to buy the stock, and now held it would you be considering selling? Selling for only tax reasons are decisions that never enter my investing mind, in the long term the short term fluctuations of price are not as important as outlook for the company, dividends and changes from my original thinking. None of this from what I can see has changed for CAT other than the stock price, which is not a reason to sell unless watching the price drop to 40 or so would be very upsetting to you, then you should sell it as this is not a stock you should have purchased in the first place.
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I might have a large capital gain this year, so I could off-set it which is why the tax consideration.

As for the stock itself, I had really bought too much and did sell some earlier when it was still high, just to reduce my holdings in it.
Naturally I wish I sold more of it back then.

What I might do is sell some, and buy some CMI as that is another stock I always wanted, but considered too expensive, now it's also on sale.

CMI has a good cash position, not much debt, and pays a good dividend like CAT.
 
We are in the middle of a worldwide recession. I would wait until we get some inflation when it makes sense for companies to spend money.
 
Senator said:
We are in the middle of a worldwide recession. I would wait until we get some inflation when it makes sense for companies to spend money.
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Not exactly in the middle :LOL: but they are some fears that it could start.
 
This thread made me look. I last bought CAT at 66 in Sep 2015. It went back as high as 75, and is now at 61. I am not going to buy more before I see signs that commodity prices start going up.
 
Even I was a bit surprised to see Cat over $73 yesterday - not sure what is driving this , but the man who bought in the 50's not too many weeks back must be feeling good ...................
 
I locked into Cat for the dividend based on the dogs of the Dow theory in November I think. Dividend has been nice and the run up in price has been even better. Wonder if anyone has different opinions for next 3-5 yrs. if infrastructure maintenance deferrals are addressed, I see continued strength. If not, I'll keep earning the 3.5-4% yield. Am I missing the obvious here?
 
As I view CAT as a bond substitute, with the risk of a dividend cut as their business continues to struggle a 3.6% yield is not nearly as enticing as when CAT was at 60 for 5.1% yield and the lack of increasing the dividend while not signifying a cut does signify management concerns over cash. Other stocks, such as Southern Company I mention in another thread have a yield of 4.18% would be a better bond substitute than CAT. However, my personal preference is not to invest in either of these at the present time but my advice were I to invest in these types of dividend stocks would be to sell CAT and take the 38% capital gain and switch into Southern Co. The best part of this switch is that dividends for each original $6000 100 share investment in CAT paying $308 per year would now be 158 shares of SO paying $354 per year in dividends a 17 percent increase in dividends received in a circumstance for low growth dividend stocks.
 
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I recently sold the remaining CAT's that I expect to have left over after my option is exercised.

The Dividend they pay out each year is more than the money they make each year,
the Dividend Payout Ratio is 1.67
Who knows where it will be, but I sold all my CAT as I had to sell something and I know I would not buy CAT right now for these reasons:
- Outlook by company is bad again.
- Stock jumped in price 16% in last month.
- dividend while good is at risk since it takes more than all their earnings.
 
Things are "Interesting" for CAT right now ...........

I can't see what is driving price up - no logical sense to me , I would be getting out right now at a nominal $84 price .... BUT , remember that if "I " am selling now at 84 .... some one else must be thinking it's a good buy at that same figure !!

I think div will be maintained .... they have a long track record of increasing div , or at very worst keeping it the same for (from memory) two years. They won't want to break that pattern ........ just my view.
 
Cortina said:
Things are "Interesting" for CAT right now ...........

I can't see what is driving price up - no logical sense to me , I would be getting out right now at a nominal $84 price .... BUT , remember that if "I " am selling now at 84 .... some one else must be thinking it's a good buy at that same figure !!

I think div will be maintained .... they have a long track record of increasing div , or at very worst keeping it the same for (from memory) two years. They won't want to break that pattern ........ just my view.
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They'll do what they need to keep their financials stable. China has hurt their profits for the past few years. I'd sell if I owned any and did sell what I owned last year. There are better dividend plays out there.


Enjoying life!
 
US heavy equipment manufacturing is hurting real bad right now, despite infrastructure spending . CAT bought mining company Bucyrus Erie a few years back, and mining has been slammed.

Komatsu announced last week their intentions to buy Joy Global, the biggest and best underground mining manufacturer, for peanuts.
 
There is a future expectation that either president may be very likely to kickoff a great national infrastructure plan to move the economy forward. Cat would be a major winner in this scenario. It plays to current value of course due to EV calculations.


Sent from my iPhone using Early Retirement Forum
 
I think a lot of the run up lately (16% in past month) has been dividend seekers, since interest rates have in the past month fallen in CD offerings, and folks are constantly rolling off higher interest vehicles with nowhere to get good rates.

I think you see this in other high dividend items, they have been bid up in price as people seek the higher return.
 
Here is a screen capture from fastgraphs (paid service).
PERFORMANCE RESULTS for 12/31/1996 to 07/27/2016.
Hard to explain the NAV run-up this year.
 

Attachments

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    CAT.PNG
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Thanks to you all for your thoughts. I have to agree, "short term" volatility and the pay-out ratio outweigh the longer term possibilities at this point.
 
Cortina said:
This is not correct ! It appears as if the div was cut in 2005 , to 25c from 41c .... however , taking into account that there was a 2 for 1 stock split, it actually rose from 20.5c to 25c.

I have bought and sold CAT over many years , and the worst that has ever happened is that they kept the div constant for 2 years. I have bought recently at around the $70 mark , and am happy with a 4.4% gross return .... and am as sure as one can be that 4 or 5 yrs down the road I will see a good return (will sell for a lot more than $70)
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Looks my "4 or 5 years" has come quicker (and impossible to explain rationally) than I thought - nibbling just under $89 today , at 25% profit + in this timescale , me thinks it's time to take it ?.
(But as I said before , someone is buying at these levels ... thinking it makes good sense ..... I just can't see it !)
 
I would hold cat at least until the next prez announce a reconstruction plan next year.


Sent from my iPhone using Early Retirement Forum
 
Fortunately I never acted on my last post and have enjoyed the news these last few days. Just another version of a lazy portfolio I guess.
 
Great advice dallas27. But I think it's time I put some stop limits in finally.
 
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