The Hedgeye Industrials Team – led by Jay Van Sciver – will discuss their Best Idea Short thesis on Caterpillar (CAT) today at 12:30pm ET.
With the recent IRS raid on Caterpillar corporate offices and some strongly worded reporting on CAT's tax and accounting practices, which included an accusation of fraudulent activity, investors should be increasingly concerned about the investment risks associated with CAT shares.
Email sales@hedgeye.com for more information.
KEY DISCUSSION POINTS
- REGULATORY AGENDA Reporting during ConExpo and highly visible corporate raid calibrated to drive strong bargaining position in settlements, but targeting reputation may backfire
- CHASTENED ENFORECEMENT Transfer pricing enforcement has been met with limited historical success, a reality CAT's advisors are likely highlighting
- UNDERSTANDING RECENT SHARE PRICE RESILIENCE Policy hopes haven't been the only cause for relative strength in CAT shares, but support appears to be fading
- PART OF BROADER CAT CULTURAL ISSUES CAT already has other investigations on accounting, unusual environmental violations, and exceptionally poor acquisition due diligence (e.g. Siwei) point to a weak corporate culture.
CALL DETAILS
Ping sales@hedgeye.com for more information. Please note if you are not a current subscriber to our Industrials research there will be a fee associated with this call.
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