Caterpillar (CAT-N)

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.

They report Wednesday. People want to know about their inventory. They will talk about the data centre. The company is doing well. Is up $60 from September lows. It's run too much. He likes it though.

He sold this before. This is expensive and is overvalued.

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.

CAT was a core holding until today's economic data showing a weaker than expected job market, adding to other weak data. So, he sold CAT. The economy is slowing. Also, he expects tech to lead the market for the coming 2-3 years.

He made a killing off this, but sold it too soon. Don't gamble with their quarter, but it's still a cheap stock that pays a decent dividend. Sell a bit and let the rest run.

It's beaten its estimates by 15% in each of the last 3 quarters. Earnings and revenue were up 20%. Pays a 2% dividend that grows 6-7% yearly.

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.

It reports Thursday. Wait till the conference call before pulling the trigger. Also, shares have been on a scorching run leading up to earnings and may need a breather.

The structural backdrop includes a lot of spending on construction and on US manufacturing facilities. Much better supply/demand for energy and materials than we've had in a decade. These are all customers of FTT.

If you look at the performance of CAT, FTT and TIH over the last year, all look very attractive. TIH does more construction, whereas FTT does more materials and so he'd lean more toward that one.

Reasonably priced. Decent earnings and growth, but not exceptional. Do peer group analysis. Often companies in a sector go up and down together, being driven by the same things. Ask if CAT has a tailwind, and is it the best in the industry? He wouldn't buy CAT, but does own URI.

Margins are improving drastically.

Tripped up a bit in execution and management. Prefers, and owns, URI. URI has been more successful in terms of growth of revenues, earnings, cashflow. 15% of a portfolio is too high, 2-4% is more normal. Trim and diversify.

It reports Monday. Orders for infrastructure and data centres have been huge. This stock is crushing the short-sellers. Is up nearly 100 points since its last quarter.

Yesterday, sold it because CAT moved up a lot in sympathy with United Rentals. They sharp rally changed the risk/reward.