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Caterpillar Inc. Message Board

bobpaulovich 29 posts  |  Last Activity: Jul 21, 2014 11:15 AM Member since: Feb 4, 2013
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  • This should be more than just a spike. Looking at chart history for CAAS, most yearly highs were taken off of a spike type of move. This time we find a much longer range bound pattern, and now a meaningful move higher from that platform.

    Sentiment: Strong Buy

  • Reply to

    Hallelujah!!

    by bobpaulovich Jul 18, 2014 9:18 AM
    bobpaulovich bobpaulovich Jul 19, 2014 12:05 PM Flag

    Good points.

    It's clear to me that the CEO is not happy with his level of wealth, and is still interested in doing anything he can to become an even bigger fish.
    The independent board members are older with excellent career/academic backgrounds. I think they advised that more money is to made by remaining a public company ( for now), and achieving a solid share price, then using this as leverage to buy something else.
    If the share price goes way up, then the CEO can do many things to build more wealth. This has been the strategy for many public companies, as you know.
    Hopefully, we go along for the ride.

    Looking back, I assume the CEO got bad advise from that outside firm noted in the initial proposal. The CEO forced the idea to be considered by the board. The independent board members thought the idea was absolutely stupid. The only way out of this was to let time pass and form a committee to kill the idea.

    Another thing to look back upon was how the initial proposal described the wheel business as not being that great, and how acquiring the real estate vacation business would be so much of a better way for shareholders to unlock significant future growth and value. Along with this proposal, the CEO would own most of the not so good wheel business, and have an option to buy out the remaining ownership from the new vacation rental version of ZX? Yesterday's press release is a complete reversal, with the CEO saying that the wheel business now holds great existing and long term potential?

    Thanks, Mr TL, for your reply/ insight.

    Our collective conclusions gives us more conviction to hold onto our ZX shares!!

    Sentiment: Strong Buy

  • Reply to

    Hallelujah!!

    by bobpaulovich Jul 18, 2014 9:18 AM
    bobpaulovich bobpaulovich Jul 18, 2014 1:47 PM Flag

    One concern I have is in the wording of the press release;

    Preliminary proposal be withdrawn? Preliminary may mean that they will make a subsequent proposal to follow soon?

    However, the only thing we may see is ZX going private. The buyout price, worst case, should still be higher than current quote. The only problem might be ZX quarterly release, to be tweaked to look bad in order to issue low ball buyout offer. Any funds would still threaten legal action regarding fair share value.
    It's that word "preliminary", that was placed in their statement, concerns me.

  • bobpaulovich by bobpaulovich Jul 18, 2014 9:18 AM Flag

    For all those who held their shares for a half year+, with very minimal subsequent news regarding this convoluted proposal, my congratulations to all.

    Seems like the Chairman has finally got some religion, realizing that his financial fate will be great by just standing pat and allowing all shareholders to prosper.

    One other note:
    Whoever bought shares yesterday, did have this inside information, ahead of this announcement.

    Sentiment: Strong Buy

  • Also major Supplier to Chrysler/Jeep USA.

    CAAS will benefit from consolidation of ZF and TRW.

  • They are steering system manufacturers/suppliers to most Major Global Automobile Manufacturers.

    CAAS is largest in China, and supplies to Chrysler USA.

    TRW mostly USA and Europe.

    ZF mostly Europe and USA.

    Japan car manufacturers get steering from mostly Japan suppliers, KOYO, NSK.

    The news that ZF is interested in making buyout offer of TRW is good news for CAAS.

    Supplier consolidation can create additional opportunities for CAAS. Car companies want to make sure that enough competition exists for each category to keep price increases under control.

    CAAS would have been bought out long ago, if it was not majority owned by Chairman Chen.

    Sentiment: Strong Buy

  • The best kept secret this year was the fact that GM management kept mostly quiet about their new large SUV lineup.

    2015 Tahoe, Suburban, Yukon, Yukon XL, Denali, Denali XL, Escalade.

    Production still ramping up, only out for several months.

    Arlington Texas factory increased production capacity from 250K to 350K.

    Added new stamping facility to Arlington facility. Previously sourced from out of state operations.

    Then what you do is:

    Add-- substantial savings from new in house stamping facility

    Add-- additional $10,000+ to transaction prices

    Add- substantial profits from additional 100,000 production capacity.

    Thus far, sales for Tahoe and Yukon this past month are +100%

    Factory still ramping up.

    Most Dealers have no inventory, due to strong sales.

    No need for GM haters to buy these SUV'S.

    Sentiment: Strong Buy

  • If remaining shareholders don't want to sell, then they don't sell.

    COH has the power of brand, product quality and global growth (Asia).

    Annual sales have tripled over the last 10 years.

    They pre announced everything including charges.

    Nothing left to hide.

    Sentiment: Strong Buy

  • So much time has passed since the initial announcement to exchange the current wheel mfg. business for a real estate vacation related company.

    April 30 was date they announced formation of special committee to study proposal and advise.

    Initial proposal was made over a half year ago. The fallout from proposal cut the share price by 50% +.

    At this point, the initial far fetched plan seems too messy to present to shareholders as being beneficial.

    Looks like the only possible outcomes are to go private and set a fair buyout price to remaining shareholders. Or to announce that the proposal is dead, and to do nothing.

    Should be worth $3.00+ share.

    Sentiment: Buy

  • bobpaulovich by bobpaulovich Jun 12, 2014 9:43 AM Flag

    From buy to neutral. Some quick money to be made by M-S from this call. However, the price of $13 is already at a washed out level.

    No doubt that Vale is the low cost producer of iron ore, by a wide margin. If Vale gets to a point where they lose money from iron ore, competition will already be bankrupt.

    These predictions for very low iron ore are only speculation. Like many markets with excess capacity, pricing still can find support. Many iron ore suppliers will reduce production below certain pricing levels. The industry can also consolidate which could change things meaningfully.

    A neutral level covers M-S.

    Vale holds more upside potential from these severely depressed levels.

    Sentiment: Strong Buy

  • The local mall based Sears location near where I live, has greatly reduced the level of Lands End merchandise they have on the floor. I would say, the level has been reduced by 85%+. They have nothing for me to buy, and I am a mens size large to extra large!!
    This company is owned by Sears, which is controlled by Edward Lampert. Since Sears is still the majority owner, Lands End will be manipulated by their need to create value. The goal for Mr. Lampert is to find any way to make the Sears company assets grow, which gives him leverage to buy or develop other assets. The problem is that his original formula, believing that the tangible assets of Sears Real Estate will grow over time, giving him more opportunity to expand or buy out other opportunities, has fizzled. The reason is that Sears real estate is dead in the water, since most property owned stores are not in prime locations. These buildings were once prime downtown locations but malls have changed all of that. Most of this problem has to do with middle America locations. Property values have only gone down. Add to this that JC Penny is now fixing their problems and Macy's is beating everybody into the ground, bad things will follow.
    Sears is now to a point where people have almost no reason to shop there. Automotive service has been ground into the dirt. No service what so ever.

    Most customers have been successfully chased away. And Macy's is squeezing margins for clothing and housewares. Home Depot and Lowes have taken away appliances and keep picking away at power tools, lawn mowers and snow blowers.

    The only things keeping Sears alive is super low interest rates and malls giving rent concessions because the malls have no one to replace the potential empty space.

    The net here is that in the U.S. we are over over retailed and we are at the start of serious consolidation.

    Hard to make any investment bets on the entire group. Best to just stay away from investing in retail..

    Sentiment: Sell

  • Reply to

    Will Buy Back Again Under $8

    by sellplg Jun 4, 2014 9:52 AM
    bobpaulovich bobpaulovich Jun 4, 2014 2:59 PM Flag

    Volume seems to confirm that not too many buyers around, and also not too many sellers either. Some smaller investors are selling small quantities, in order to raise cash for other opportunities. The buyers know this and are picking up some of these shares on the cheap.

    Investor interest is elsewhere for now.

    Still a very good buy.

    Sentiment: Strong Buy

  • This stock has been in decline for 5 years. The current price represents a triple bottom, over the last year. So, the current price has been range bound.

    The predictions for lower iron ore price per ton, are being made by Goldman and others. These investment firms bet their book before they make these announcements, so they can make instant profits. They then close out their position, as manufacturing and China improve. Then they go long only to follow with a bullish call on iron ore.

    Iron ore has been falling for years. But at some point the producers get religion, and everyone digs in their heels to establish a base price. When the dust settles, Vale is the low cost quality producer.

    Sentiment: Strong Buy

  • Reply to

    Very good sales numbers.

    by bobpaulovich Jun 3, 2014 9:59 AM
    bobpaulovich bobpaulovich Jun 3, 2014 10:27 AM Flag

    The recalls just mean that GM is on top of any safety issues, as it relates to new and existing vehicles.
    The recalls make existing and potential buyers feel much more confident in buying a new GM vehicle.

    The recalls also bring existing owners into the dealers. People lookk at the new vehicles, mileage is 50% higher, monthly interest is almost free with a home equity loan. The savings on gas and auto repair and increased mileage makes it less costly to own new versus an older vehicle.

    So if you want to save money, you must go out and buy a new car.

    One minor repair on an older vehicle can be $750.
    Tire replacement $1,000.

    Just one repair on an older vehicle, per year, is substantial.

    Sentiment: Strong Buy

  • bobpaulovich by bobpaulovich Jun 3, 2014 9:59 AM Flag

    More to follow.
    The all new 2015 Tahoe, Suburban, Yukon, Denali and Escalade are just starting to hit showrooms and most dealers are sold out. These are selling at near list, and the margins are up significantly from the models these new 2015's have replaced.
    They produced and sold 200,000 units, of the very old design, for year 2013.

    Production rate in Arlington, Texas factory is currently 330,000. And they will move it higher. New on site stamping facility saves big transportation costs.

    These vehicles will add $2.00 share in profits.

    GM shares go much higher.

    This is bad news for for the GM haters crowd.

    Sentiment: Strong Buy

  • This is the most in depth report I have ever read on CAAS. They even filmed the truck shipment/delivery activity at the CAAS factories.

    We should hear more news of new contract award business soon.

    Sentiment: Strong Buy

  • Many people are happy with their GM cars. The recall brings them back to the dealership, and they look at the new models in the showroom. They see that the new model gets 50%+ better mileage. They determine that they can get a new car, spend 50% less on gas, and apply that money to the new car payment. The customer also feels confident that the new vehicle is manufactured to a higher safety/quality standard.

    Key institutional funds have increased their GM holdings:

    Goldman Sachs-- added 1.8 mil. shares= 8.8 mil shares total

    Appaloosa Mgmt.--added added 2.9 mil. shares= 7.8 mil shares total

    I would not bet against these guys.

    Sentiment: Strong Buy

  • bobpaulovich bobpaulovich May 27, 2014 7:31 AM Flag

    The dividend is a good sign of confidence going forward. We may also see a small share repurchase program. Additional announcements regarding new contract awards should be made soon.

    These joint venture arrangements are between the auto manufacturers are a great thing. They put up half the capital for new production and these partnerships are eternal arrangements. Losing the business is near impossible!!

    Sentiment: Strong Buy

  • We may discover that a ton of safety recalls will equate to a good increase in new vehicle sales. This is because potential new car buyers, will now have an increased level of confidence, that the new GM vehicles will hold to very high safety standards than in the past. Furthermore, recalls get existing owners back to the local dealerships.
    There are still many existing owners of older GM vehicles who are very satisfied with their GM vehicle. And would buy a new GM vehicle.

    Sentiment: Strong Buy

  • Reply to

    Momentum building

    by ciaxgbby May 21, 2014 11:52 AM
    bobpaulovich bobpaulovich May 23, 2014 10:48 AM Flag

    China stocks have had no following for the last several years. Many people have been burned and vowed not to return. Over the last year CAAS has been in a nice chart pattern. This shows good support for the current trading range, with a slow and steady move higher. At some point global investors will turn positive on the China market. This would help CAAS.

    Current shareholders have no reason to sell, unless the broad market sells off.

    Company affirms 15% growth for this year.

    Sentiment: Strong Buy

CAT
105.04-3.34(-3.08%)Jul 24 4:02 PMEDT

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