David BurrowsCaterpillarCATBUYApr 03, 2024

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.

He owns neither. CAT has down really well. Both benefit as agriculture recovers. 

All 3 of the Top Picks today involve taking a bit of money away from the infrastructure plays.

This name plus WMT have been using AI the most and for the longest. Has autonomous and semi-autonomous machines. For those machines that have drivers, they just launched a CAT-AI system -- like having a friend and a coach in the cab. AI is being used for predicting and for supply chains.

His 12-month price target is $750. Buy 1/3 here, another ~$645, and the final 1/3 ~$605. Yield is 0.89%.