Caterpillar (CAT)

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%.

It reports Thursday. They make back-up generators needed to keep server farms at data centres running. CAT no longer falls on earnings, not anymore. He likes CAT.

Many feel this is a data centre play, so shares are up 54% in one year. Too high to buy now.

Likes CAT in the industrial space.

With recent events in Venezuela (and that's a longer-term type of thing), he certainly sees the path for more infrastructure buildout around the world. Obviously, some of the US names are multinational so you could stick with those. There are global names out there, but the US names will get you far.

He took profits, and the stock keeps going up. Concerned that PE is near a 10-year high, so valuation's getting tricky. Forward PE is about 29x for ~11% growth, a bit expensive for an industrial. But he does love the name. We'll see a lot more infrastructure buildout.

If you're looking to get in, wait for a dip.

Upgraded today. Momentum will keep this going up. They trend to data centre building only helps.