Tuesday, January 17, 2017

Caterpillar [CAT] - Last Infrastructure Stock

Caterpillar Inc.    [CAT]

     Caterpillar will be the last infrastructure stock I look at. At least for the time being and with the purpose of Trumps infrastructure spending boost. On Saturday the 14th, an article was posted on TheStreet along with a video from Cramer saying "Trump Could Make Caterpillar Great Again." 

     Caterpillar manufactures and sells construction, mining, and different types of engines. If you're driving on the highway, or anywhere near construction then you'll likely see some type of equipments with the classic 'CAT' logo on it. They offer somewhere around 20 different type of machines in their construction industries segment. They are headquartered in Peoria, Illinois.

     First things first is the 50 moving average about to cross over the 200 day moving average. The golden cross. That alone is very good sign for the future of the stock. If you take into account the infrastructure spending increase and the recent earnings wins, it has some room to grow in 2017. There are some things to be wary of, though. Some different people and articles are saying this stock is over-valued right now. The forward P/E is 31.47 which is above the industry average at around 22. So it's more expensive in that respect. Also the MACD and the stochastic indicator show an overbought stock.

     Caterpillar had an amazing 2016 performance. An increase in share price of about 37%. There is definitley room for growth for 2017 but right now seems a little over valued.

No comments:

Post a Comment