Pre-Market Laggard: Caterpillar (CAT)

Trade-Ideas LLC identified Caterpillar (CAT) as a pre-market laggard candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Caterpillar

(

CAT

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Caterpillar as such a stock due to the following factors:

  • CAT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $376.2 million.
  • CAT traded 37,926 shares today in the pre-market hours as of 7:50 AM.
  • CAT is down 2.1% today from Friday's close.

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More details on CAT:

Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. The stock currently has a dividend yield of 3.9%. CAT has a PE ratio of 41. Currently there is 1 analyst that rates Caterpillar a buy, 1 analyst rates it a sell, and 12 rate it a hold.

The average volume for Caterpillar has been 5.1 million shares per day over the past 30 days. Caterpillar has a market cap of $46.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.21 and a short float of 7.4% with 8.34 days to cover. Shares are up 16.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Caterpillar as a

hold

. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and generally higher debt management risk.

Highlights from the ratings report include:

  • 36.11% is the gross profit margin for CATERPILLAR INC which we consider to be strong. Regardless of CAT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.86% trails the industry average.
  • CAT, with its decline in revenue, underperformed when compared the industry average of 12.3%. Since the same quarter one year prior, revenues fell by 25.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • After a year of stock price fluctuations, the net result is that CAT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Machinery industry and the overall market, CATERPILLAR INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Net operating cash flow has significantly decreased to $489.00 million or 61.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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