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Caterpillar Inc. Message Board

richoncat 84 posts  |  Last Activity: 16 hours ago Member since: Nov 24, 2006
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  • richoncat richoncat 16 hours ago Flag

    "Middle Class Jobs are Finally Coming Back"

    And the trend should continue. "The mix of jobs is improving," said Ryan Sweet, director at Moody's Analytics, which found that growth in mid-wage jobs has accelerated to an average of 1.5% in 2014, from 1% for the two years prior. "As the economy begins to grow consistently above its potential, we will see more middle class jobs being created."

    Oh that's got to be bad news.

    Sentiment: Hold

  • "Consumer Spending in U.S. Rose in June by Most in Three Months"
    "Food-Stamp Decline Shows Low-Income Relief: EcoPulse"
    "Twin Corn Ears Expand U.S. Yields With Bin-Busting Crop"

    That can't be good for the US economy, right?

    Sentiment: Hold

  • Hey Toothy, CAT's trading below the lower Bollinger Band and the RSI is near 30. Do you think I should make another short term buy call so you can harass me about it for the next 3 years? You know I don't believe any of the technical mumbo-jumbo that thinks near term statistical results have any influence on future price actions. But I guess I feel compelled to give you something to follow and criticize anything I say. So, consider it done. Buy here maybe we can make a buck together. Sweet.

    Sentiment: Buy

  • richoncat by richoncat Jul 31, 2014 8:46 AM Flag

    "Jobless Claims in U.S. Over Past Month Drop to Lowest Since 2006"
    "Mid-Wage Work Comes Back as U.S. Moves Past Burger-Flipping Jobs"
    Headlines showing US economy gaining strength. If we can get a little correction here, then we'll be off to new highs. Come on in bears, the water is fine. Short a little here, short a little there. Oh Toothy is gonna be pi$$ed. You know he hates good news. It doesn't fit with his vision of a screwed up world.

    Sentiment: Hold

  • Reply to

    RICH: share count Q

    by quantuon Jul 29, 2014 1:39 PM
    richoncat richoncat Jul 30, 2014 6:40 AM Flag

    I don't know how many shares they grant every year. 8 mn wouldn't be out of the question I guess. Since options are now an expensed item the number must be buried in the financial reports somewhere. It's still has the effect of taking stock out of circulation as they would have issued new shares if they hadn't bought some back to distribute via options.

    Sentiment: Hold

  • Reply to

    Accelerated Buyback After 7 Point Drop

    by richoncat Jul 29, 2014 9:54 AM
    richoncat richoncat Jul 29, 2014 10:22 AM Flag

    Well we've heard from several of out resident bears with comments similar to the one I mocked. It's hilarious.

    Sentiment: Hold

  • Reply to

    CAT is Panicking with buy back

    by masterblastersims Jul 29, 2014 10:09 AM
    richoncat richoncat Jul 29, 2014 10:20 AM Flag

    Evidently Mr Market likes it. +$2.00 this AM. I hope they panic more this year. BTW all their debt is back by receivables at CAT Financial, but you already know that you just choose to ignore it.

    Sentiment: Hold

  • Reply to

    Accelerated Buyback After 7 Point Drop

    by richoncat Jul 29, 2014 9:54 AM
    richoncat richoncat Jul 29, 2014 9:56 AM Flag

    By the way what happened to Chanos? He's been awfully quiet since he blew this call.

    Sentiment: Hold

  • Oh I can hear the howling already. "Borrowing money to buy back their stock". "Phony books to hide their losses". "Just more financial engineering to delay the inevitable meltdown". What a bunch of garbage. This is a tremendous use of their free cash flow. Return value to shareholders while they await the rebound in the mining business.

    Sentiment: Hold

  • Reply to

    Predictions on 2Q Earnings

    by jjvors2 Jul 20, 2014 7:54 PM
    richoncat richoncat Jul 28, 2014 7:00 PM Flag

    Well I nailed this one. $1.69 excluding restructuring costs. But like I said it wouldn't matter if revenues came in short. So we sell off $7. The fast money heads to the exits. They'll keep propping up the stock with buybacks and dividend increases but the real move won't happen until revenues improve. So where do you think we are in the cycle? Are we approaching the end of the cycle with interest rate gains, economic slowdown and market contraction or are we at the beginning of the next expansion leg? If you believe the former it's time to bail. If it's the latter, double down as new highs are in the future.

    I'm not thinking Mr. Friendly is going to be much help. I might just take Toothy off IGNORE to watch him bash this guy, That should be fun.

    Sentiment: Hold

  • Reply to

    richoncat-Heavy-Machinery Makers Push Tracking Tools

    by ray839 Jul 27, 2014 9:29 PM
    richoncat richoncat Jul 28, 2014 12:29 PM Flag

    The parts business is the crux of their business strategy. They view the worldwide machine population as an annuity that will drive parts demand for decades. The big machines will consume up to five times its original cost in parts over its lifetime, $millions. Parts with margins of 300-400%. The smaller machines skid steer and backhoe loaders are more of the throw away variety. They replace filters, hoses, pumps and the like on small machines but big rebuild items, transmissions, engines, final drives, undercarriage etc are reserved for the large machines. Many will be rebuilt several times over their useful lives.

    Many equipment manufactures use off the shelf, purchased third party components. CAT generally designs proprietary components precisely because that requires customers to come back to CAT for those replacement parts. The parts business is built into every design, sourcing and sales decision. How will that decision impact the highly profitable parts business? That's why it's very common to find purchased components on the smaller machines and CAT designed and sourced components on the big machines.

    Internet linked machines will alert customers and dealers if there are issues with their machines. The logic being make small repairs before they result in big system failures and resulting increased operating costs. Thus constantly connecting the customers to CAT dealers. By contract dealers are required to purchase their parts from CAT unless they are working on competitors machines. You will never see an aftermarket, will fit part coming from a CAT dealer.

    Sentiment: Hold

  • Reply to

    Out of ideas but still plenty of gimmicks...

    by disk_masher Jul 24, 2014 11:02 PM
    richoncat richoncat Jul 25, 2014 8:48 AM Flag

    Would you like to detail your allegations? They made a billion dollars on $14B in sales. They don't control the economy. What decision did they make to slow down China growth or cause the European recession or finish the World Cup development in Brazil? Which of the managers do you believe is doing a bad job? You just want to "stick it to the man". You have no idea how hard those jobs are and how many hours those guys work. Trust me you couldn't keep up with their secretaries. Two good quarterly beats under less than stellar conditions. What else do you want?

    Sentiment: Hold

  • Reply to

    Has anybody seen Backlog?

    by cat_2_75 Jul 24, 2014 1:44 PM
    richoncat richoncat Jul 24, 2014 2:40 PM Flag

    Huh? A stale number being carried over from quarter to quarter? Backlog is the difference between order rates and production rates. Many of CAT's high end products are made to custom order with lead times exceeding 90 days. So by definition any custom machine ordered this quarter will be in backlog until it is produced several months from now. They don't keep an unlimited number of 797 truck frames, 994 buckets or 3516 engines on hand. Over time if order rates exceed capacity backlog will grow. When matched it'll stay constant. When they're under current capacity it will decrease. It's just math.

  • Reply to

    CAT Results

    by richoncat Jul 24, 2014 7:39 AM
    richoncat richoncat Jul 24, 2014 9:41 AM Flag

    I said yesterday that continuing the run up in CAT stock was contingent upon revenues starting to improve. This year will probably be one of the best three in company history but will remain nearly 20% off record highs seen in 2012. But without a hint of near term revenue increases it'll be tough to maintain better than market multiple. Let's see what they say on the call at 11:00 ET. Operationally they're doing really well. Variable costs well under control and CapEx held to a minimum. They can bounce along at this level and generate a ton of cash. But until we see revenues increase, I think we've seen the near term highs.

    Sentiment: Hold

  • richoncat richoncat Jul 24, 2014 9:22 AM Flag

    Second largest global construction market at 6% of Cat's revenues? Get you facts right. CAT expects China to eventually grow into a a huge market hence all the investment there, but that will take time. BTW they don't use borrowed money to fund stock buybacks. They use free cash flow. CAT Finance borrows to fund their business and it's covered by receivables.

    Sentiment: Hold

  • Reply to

    CAT Results

    by richoncat Jul 24, 2014 7:39 AM
    richoncat richoncat Jul 24, 2014 8:43 AM Flag

    Why not now? Would you wait for it to go much higher in the future? They obviously think that future results will be much stronger as mining recovers. They have record free cash flow at this moderate business level, and their debt is covered by CAT Financial's receivables. What would you have them do with the extra cash?

    Sentiment: Hold

  • Reply to

    CAT Results

    by richoncat Jul 24, 2014 7:39 AM
    richoncat richoncat Jul 24, 2014 7:47 AM Flag

    ...in line with my expectations. Beating the analyst's consensus by $.04. $1.57 vs $1.53.

    Sentiment: Hold

  • richoncat by richoncat Jul 24, 2014 7:39 AM Flag

    PPS of $1.57 all in. $1.69 excluding restructuring costs. Pretty much in line with expectations. Plus they announce additional stock buyback of $2.5 Billion for Q3 '14. Strong dividend and stock repurchase will keep this floating until revenue picks back up. Pre-market seems disappointed on thin volume. I think it'll rebound after the report and conference call is digested.

    Sentiment: Hold

  • Reply to

    Inflation, Where? NY City Maybe

    by richoncat Jul 23, 2014 7:02 AM
    richoncat richoncat Jul 23, 2014 12:26 PM Flag

    Good to hear from you. It's been a while. Yeah gold will still have value after Armageddon. It's an excellent hedge against inflation as it will increase is dollar terms if the currency devalues. We've seen it several times during out lifetimes. Watch the movement in the price of gold and you get a good indication of the underlying inflation. My observation this morning is that gold has remained relatively flat for the past year. Long term bond yields are also low. If neither of those are moving higher there is little fear of inflation heating up.

    From CAT's perspective, revenues had better start to pick up or this latest run up will run out of steam. Thins mornings news of decreasing declines isn't going to cut it. If this latest Russian situation tips Europe back into recession I'm going to be increasingly concerned. Time will tell. GL.

    Sentiment: Hold

  • Just saw a chart on gold prices for the past year. It was basically flat with some variation around the mean. Isn't gold the safe haven investment during inflationary periods? I thought we always see a run up in gold prices if the markets sniff a hint of inflation? Some here say inflation is rampant and a growing threat. They see run away prices for everything from ground beef to green beans. Isn't that a sure fire indication of inflation? There are a ton of reasons for price movement at the retail level; supply constraints, marketing decisions, new market penetration strategies, seasonal issues, on and on. Simply seeing price increases in the highly variable food segment is not evidence of inflation.

    Investopedia defines inflation as: "The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling". By definition if wages are stagnant there can there be no significant inflation. If people don't have additional money to spend companies can't make price increases stick. If prices rise, price in-elasticity will force them back to equilibrium as demand falls. If wages are flat where does the money come from to feed the inflationary cycle? Maybe there's inflation in NY for Gucci bags and S550's because of all the money being pumped into the bond market. But most of us aren't looking for $1,000 handbags and luxury sedans. Just saying'.

    Sentiment: Hold

CAT
100.52-0.23(-0.23%)Aug 1 4:02 PMEDT

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