Caterpillar : Reach the record high
Caterpillar reported a 60% rise in its fourth-quarter earnings. Profit per share rose to 2.32 dollar from 1.47 dollar per share in the fourth quarter 2010.
Total sales were 17.243 billion dollar, an increase of 4.436 billion dollar, or 35 percent, from the fourth quarter of 2010. Asia is the group’s strongest market with a 49 percent increase in total sales, then Latin America with 33 percent growth. Sales in North America only grew by 28 percent.
For 2012, the company projects sales for 68-72 billion dollar, and earnings of around 9.25 per share, higher than Thomson Reuters’ estimates.
Technically, in daily chart, the share is in bullish trend on short and mid-term, as identified by upward trend of moving average 20-days situated at 100 USD. Today the share is open with an important bullish upside gap about 3%, on the score of enthusiasm for earnings releases. The share is very close to reach the record high at 115.5 USD.
For the very short-term we suppose a fall towards 106 USD, in this way the share may fill the gap. This price could be a good point of entry; in fact the bullish pattern with strong fundamentals, they could continue to pull the share in upward trend. Investors with long-term trading strategy they could take a buy position to aim at 130 USD, with potential gain of 22%, replying the last upward trend. We should cover the strategy with a stop loss at 100 USD
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Valuation |
2013e |
2014e |
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PER (Price / EPS)
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12,3x |
10,6x |
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Capitalization / Revenue
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0,94x |
0,88x |
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EV / Revenue
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1,03x |
0,94x |
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EV / EBITDA
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6,63x |
5,73x |
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Yield (DPS / Price)
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2,35% |
2,52% |
| Profitability |
2013e |
2014e |
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Operating Margin (EBIT / Sales)
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11,2% |
12,0% |
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operating laverage (Delta EBIT / Delta Sales)
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-2,64x |
2,23x |
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Net Margin (Net Profit / Revenue)
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7,67% |
8,16% |
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ROA (Net Profit / Asset)
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8,11% |
8,47% |
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ROE (Net Profit / Equities)
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24,9% |
25,2% |
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Rate of Dividend
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28,7% |
26,6% |
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