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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 46837  
Subject: Caterpillar selling for under $83 Date: 10/10/2012 2:52 PM
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This is vs a support level of $82+.

CAT has been reducing earnings estimates due to slowdown in Europe and now China. Slowdown in coal and iron ore is also a factor. But if you think the politicians will do as they should and slow recovery from here is likely, this is a no brainer.

The immediate news is said to be reduced earnings estimate from Cummins. But CAT is a Dow stock which gets buffeted when international investors sell their Dow based investments.

CAT is an industry leader, a global leader, and a well managed company.

Great buying opportunity.
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Author: haywool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46614 of 46837
Subject: Re: Caterpillar selling for under $83 Date: 10/11/2012 7:24 AM
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Hey paul !

I'm torn between DE and CAT. DE has done very well for me. Prolly cuz I've held it for a very long time ... longer that CAT. CAT has done not so good.

I think your assessment is correct but I'm still torn.

Thanx,
Rich (haywool)

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 46615 of 46837
Subject: Re: Caterpillar selling for under $83 Date: 10/11/2012 2:18 PM
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Hi Rich,

The third one in the mix is Cummins Engine (CMI). If you plot the three for today, CMI is worst off, taking an 8% hit at the moment; DE is doing best, dn 1.5%; CAT is in the middle, dn 4%.

These are kind of bobsey twins. They tend to move together. Yet they serve different markets, and you would think their earnings would reflect that.

Deere is probably benefiting from a WSJ story today saying that soybean production in South America will set records this year and make up for losses in the US due to drought. As seasons are reversed there, they are starting to plant now and will harvest late winter/early Spring.

Strong prices should be good for Deere next year, but in the drought areas financing will be stretched and equipment purchases are easily deferred for a year. Planting has to be top priority.

But I must admit I don't know how well Deere does in South America. Are they the leader there? Or is there major competition?

I still think Cat is a great investment when people talk about water shortages. Dams, canals, pipelines all have to be good business for CAT.

Cummins is more of a diesel engine manufacturer with trucks being their main customer. I know they had a run a few years ago when new diesel regs were coming and trucking companies decided to replace old equipment. But slow economy must be causing slower truck sales, I would think.

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