A company that will benefit from infrastructure plans...
STOCK 3 OF 5
Caterpillar will undoubtedly be one of the biggest beneficiaries if President Trump rolls out his infrastructure plans to rebuild America. Caterpillar rallied again in December, climbing 11.6% and ending the year with gains of 70%. Yet, this wasn’t due to Trump tweets about building a wall. Caterpillar’s December rally was likely driven by upcoming Republican tax legislation.
“The Tax Cuts and Jobs Act supports replacement of equipment at an accelerated pace through 2022 as both new and used equipment are now eligible for expensing, a positive for Caterpillar’s North American end markets,” wrote analyst Ann Duignan. The analyst referenced the tax bill’s inclusion of tax deductions applicable to new and use property acquired before 2023.
Caterpillar and Recovery in Commodity Prices
In May 2018, Stan Wong selected it as a Top Pick saying he “Just bought it this month. The global economy is accelerating, and sales are doing well. There is a recovery in commodity prices and that is helping them. Trading at 14 times earnings with a 20% growth rate.” His analyst price target was $172.32 at that time.
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