John O'Connell, CFACaterpillarCATBUYAug 20, 2019

Hasn't owned, as it's always been too cyclical. Safer way to play mining. Ran so fast, so quickly. PE multiple north of 30x, so a lot of positive things are already baked in. FCF yield is very small. Growth profile quite robust, but if that were to get hit then valuation would come off.

In the industrial space, names with more attractive growth than HON's include CAT, GEV, and VRT.

He trimmed it. Trading at a 32x forward PE, but typically in the mid-teens. As long as data centres are being built, this will participate, but it doesn't hurt to take some money off the table.

They host an HQ visit for investors on Monday. Their construction division is essential to the data centre build. It trades at 36x PE like a tech stock. He likes it, but it's overheated. Does it merit the premium?

Driven by tailwinds in oil/gas, infrastructure and the data centre build.

Has seen many upgrades. Their earnings were out of control. They have $60 billion in backlog orders, and revenues up over 20%. Loves it.

Since he bought it last May 25, it's up 140%. Insane. He is taking profits. It's overvalued here. It's not just a data centre story.

Lots of uncertainty in Canada around infrastructure and energy. Much less uncertainty in the US on the infrastructure buildout. More of an actual HALO.

It enjoys demand for building infrastructure and data centres.

Is a direct play on global infrastructure and energy demand.

Still owns, and won't sell. CAT was overvalued a month ago, but expects it to grow into its valuation. It won't be a 10-year hold for him.

The CEO will do a fireside chat at ConExpo. He may talk about data centres are using CAT generators for power. He kicks himself for not buying this sooner.

A name to look at in the infrastructure space.

Equipment dealers are a great place to be -- pass through inflation very well, good plays on mining and global growth. TIH and FTT have the same type of chart, but not so much with WJX.

Technically, over its skis. So don't buy here. But the theme has legs for the next 3-5 years. FTT is a better deal (but at a lower level as well).

CAT isn't open AI, but they are part of the AI tool belt. The PE is uncomfortable now, but also at $100 lower.