#1 - Caterpillar (NYSE:CAT)
Caterpillar (NYSE: CAT)– The simple explanation for Caterpillar being on this list is China. The company reported that 44 percent of its first-quarter sales growth came from the Asia-Pacific region, led by China. That helped the company report a strong 24 percent growth in retail sales of machinery for the months of March, April, and May. And their strong first quarter results included record earnings per share (EPS) of $10.75 for the fiscal year 2018. However, perhaps in response to the Trump administration announcing the first round of tariffs in March, Caterpillar already warned that this may be as good as it gets. In fact, the 24 percent growth was the lowest of their five previous rolling three month periods. The company is heavily dependent on the construction cycle and many analysts are seeing that cycle ripe for a correction.
Investors looking for positive news can point to strong second-quarter earnings which saw management raise their full-year adjusted profit per share by 7 percent and a stock that has a forward P/E ratio just under 12. It should be noted that Caterpillar is not just dependent on construction; their business is closely tied to the energy and mining industries, which are influenced by commodity prices, particularly the price of oil. If these industries continue to show strength, then Caterpillar should continue to show strength. Still, at the current time, analysts are viewing Caterpillar with caution.
About Caterpillar
Caterpillar Inc manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide. Its Construction Industries segment offers asphalt pavers, compactors, road reclaimers, forestry machines, cold planers, material handlers, track-type tractors, excavators, telehandlers, motor graders, and pipelayers; compact track, wheel, track-type, backhoe, and skid steer loaders; and related parts and tools.
Read More - Current Price
- $387.51
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 7 Hold Ratings, 4 Sell Ratings.
- Consensus Price Target
- $365.33 (5.7% Downside)
