Jim Chanos is just about to give his best investing idea at the CNBC/Institutional Investor Delivering Alpha Conference.
He calls his segment "the destroying Alpha" portion.
And the famed short-seller's next victim is... Catterpillar Inc.
WHY? The global commodities super cycle is over, China is slowing down, and Catterpillar is "in the wrong business at the wrong time."
The stock is already feeling the burn, it's down $2.
Of course there are accounting issues — negative free cash flow after dividends. Also, he said the company was overly aggresive writing down a recent merger.
If you take away one phrase form this quick break down, let it be this — Caterpillar is facing "commodities super cycle headwinds."
Another note: The CEO's notes have been "off", says Chanos. His predictions are a bit too high.
You've been warned.
And FYI: Chanos' still short his pick from last year, Hewlett Packard adding that the services business for servers is also declining.
Also, Chanos is being mysterious about his short on a European auto company (or companies). He's hedging with Volkswagon.
That's all we know.
More From Business Insider
- REPORT CARD: Here's How Some Of The World's Biggest Investors Performed With Their Picks At Conference Last Year
- Hedge Funds Have Actually Been Pretty Good Stock Pickers This Year
- Bill Ackman Needs A Huge Score
- Private Equity & Hedge Funds
- Jim Chanos