Caterpillar: 6 Questions & 1 Chart From Our Short CAT Conference Call

Takeaway: Hedgeye Industrials analyst Jay Van Sciver recently added Caterpillar to their Best Ideas Short List

Editor's Note: Our Industrials analyst Jay Van Sciver hosted an in-depth presentation on his Caterpillar short call today. He recently added CAT back to his Best Ideas list. Below are key discussion points he covered during the call. 

Caterpillar: 6 Questions & 1 Chart From Our Short CAT Conference Call - z cat cartoon

KEY DISCUSSION POINTS:

  • Orders vs. Sales: Do order rates support current 2H16 & 2017 consensus estimates?
  • Mutually Exclusive Goals:  Can CAT maintain its dividend and its credit rating?
  • Materials Cost:  What do higher steel prices mean for future manufacturing decrementals?
  • CAT Financial: Is the decline in allowances appropriate and sustainable?
  • Aftermarket Cycle Stability: Do improvements in mining equipment aftermarket move the needle for CAT?
  • Valuation:  Are CAT shares pricing in a cyclical rebound in Mining and Oil & Gas capital spending? 

Caterpillar: 6 Questions & 1 Chart From Our Short CAT Conference Call - caterpillar