Stock price when the opinion was issued
Likes it. Trading right at 200-day MA, so it's corrected down to an interesting level. 15x forward PE, growth rate is high single digits to low doubles.
China's always in the back of his mind, as it's such a big economy and affects so many different companies. Revenue from China is 18%, North America 52%, and Europe 20%. His base case for NA remains a soft landing, no recession.
Active in over 190 countries. Infrastructure spending should increase due to new US administration. Tax cuts, deregulation, and trade policies should also help. Stimulus in China might be of benefit, as might Trump's threats to DE. Yield is 1.4%.
Now has broken above previous resistance. Pretty good trend of higher highs and higher lows since late 2022.
Higher highs so far, and we're testing the last low. Overall trend is good. He's still buying, has done 2 legs of 2% each so far. Yield is 1.5%.
Note that if the market turns down in a big way this will be one of its victims, as industrials will be one of the first to fall.
CAT is $165B market cap, 17X earnings, 1.62% yield, 6.96% five year dividend growth, down 4% YTD, debt/cash flow about 3X, forward growth about 10%. DE is $135B, 25X earnings, 1.30% yield, 14.68% dividend growth, 5X debt/cash flow, forward growth 15%. We would consider both HOLDS today. While good companies, they will be vulnerable in a global economic decline, as both have been in prior cycles. Automation/AI will help margins, but this will take some time to show up in the numbers. Mining expansions (CAT) and weak spending (DE) will likely mean less-than-robust growth and/or weak sentiment for a period of time.
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She's been looking at it. Global. Benefiting from US onshoring, buildout of semiconductor plants, and mining. Question of whether it's near peak earnings. Inventories seem pretty clean. She's waiting for stock to pull back more before deciding.