Caterpillar Stock Buy Hold or Sell Recommendation

CAT
 Stock
  

USD 178.29  0.47  0.26%   

Considering the 90-day investment horizon and your above-average risk tolerance, our recommendation regarding Caterpillar is 'Strong Hold'. Macroaxis provides Caterpillar buy-hold-or-sell recommendation only in the context of selected investment horizon and investor attitude towards risk assumed by holding CAT positions. The advice algorithm takes into account all of Caterpillar's available fundamental, technical, and predictive indicators you will find on this site.
  
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The advice is provided from Caterpillar's buy-and-hold perspective. Continue to Caterpillar Analyst Recommendation to compare Macroaxis Buy or Sell Recommendation with the current analyst consensus. To check ratings for multiple equity instruments, please use the Instant Ratings tool. We conduct extensive research on individual companies such as Caterpillar and provide practical buy, sell, or hold advice based on selected investing horizon and risk tolerance towards Caterpillar.

Execute Caterpillar Buy or Sell Advice

The Caterpillar recommendation should be used to complement the buy-or-sell advice compiled from the current analysts' consensus on Caterpillar. Macroaxis does not own or have any residual interests in Caterpillar or other equities on which the buy-or-sell advice is provided. Please provide your input below to execute Caterpillar's advice using the current market data and latest reported fundamentals.

Time Horizon

Risk Tolerance

Execute Advice
Sell CaterpillarBuy Caterpillar
Strong Hold

Volatility

Very steadyDetails

Hype Condition

Under hypedDetails

Current Valuation

UndervaluedDetails

Odds of Distress

Below AverageDetails

Economic Sensitivity

Almost mirrors the marketDetails

Analyst Consensus

HoldDetails

Financial Strenth (F Score)

StrongDetails

Financial Leverage

Not RatedDetails

Reporting Quality (M-Score)

Unlikely ManipulatorDetails
For the selected time horizon Caterpillar has a Risk Adjusted Performance of (0.18), Jensen Alpha of (0.10), Total Risk Alpha of 0.0047 and Treynor Ratio of (0.29)
Macroaxis provides advice on Caterpillar to complement and cross-verify current analyst consensus on Caterpillar. Our investment recommendation engine determines the company's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon. To make sure Caterpillar is not overpriced, please confirm all Caterpillar fundamentals, including its revenue, cash flow from operations, current asset, as well as the relationship between the cash per share and beta . Given that Caterpillar has a price to earning of 19.14 X, we suggest you to validate Caterpillar market performance and probability of bankruptcy to ensure the company can sustain itself in the current economic cycle given your prevailing risk tolerance and investing horizon.

Caterpillar Trading Alerts and Improvement Suggestions

Caterpillar generated a negative expected return over the last 90 days
Caterpillar has a strong financial position based on the latest SEC filings
About 71.0% of the company shares are held by institutions such as insurance companies
Latest headline from seekingalpha.com: Acquisition by David Calhoun of 306 shares of Caterpillar subject to Rule 16b-3

Caterpillar current analysts advice

We track the performance of the top 100 financial experts across various large and mid-size financial boutiques. Caterpillar analyst recommendations are determined by taking all analyst recommendations and averaging them as Strong Buy, Buy, Hold, Strong Sell or Sell. There is no one specific way to measure analysis performance other than comparing it to the past results via a very sophisticated attribution analysis. Caterpillar analyst consensus and target price projections should be used in combination with other traditional techniques such as stock price forecasting, technical analysis, earnings estimate, and various momentum models.
Target Mean Price235.12
Target Median Price240.00
Target High Price280.00
Recommendation Mean2.40
Number Of Analyst Opinions25
Target Low Price164.00
Average Consensus Hold
The consensus estimates and target price estimation comprises individual analyst assessments, and may or may not mutch the Macroaxis buy or sell advice. It is determined by taking an average of all analyst recommendations and classifying them as Strong Buy, Buy, Hold, or Sell.

Caterpillar Returns Distribution Density

The distribution of Caterpillar's historical returns is an attempt to chart the future uncertainty of Caterpillar's future price movements. The chart of the probability distribution of Caterpillar stock daily returns describes the distribution of returns around its average expected value. We use Caterpillar price's Value At Risk and its Upside Potential as a relative measure of the distribution. The graph of the distribution of Caterpillar returns is essential to provide solid investment advice for Caterpillar stock.
Mean Return-0.29Value At Risk-4.35
Potential Upside3.20Standard Deviation2.27
 Return Density 
      Distribution 
Investment risk management requires an estimate of the probability of extreme price changes. Therefore, the correct representation of the distribution of Caterpillar historical returns presented in an easy-to-digest graphical form helps investors and money managers understand the risk-reward trade-off of different investement strategies.

Caterpillar Stock Institutional Investors

Have you ever been surprised when a price of an equity instrument such as Caterpillar is soaring high without any particular reason? This is usually happening because many institutional investors are aggressively trading Caterpillar backward and forwards among themselves. Caterpillar's institutional investor refers to the entity that pools money to purchase Caterpillar's securities or originate loans. Institutional investors include commercial and private banks, credit unions, insurance companies, pension funds, hedge funds, endowments, and mutual funds. Operating companies that invest excess capital in these types of assets may also be included in the term and may influence corporate governance by exercising voting rights in their investments.
Security TypeSharesValue
Vanguard Group IncCommon Shares48.2 M10.7 B
State Street CorpCommon Shares40.8 M9.1 B
Blackrock IncCommon Shares37.5 M8.4 B
Capital World InvestorsCommon Shares20.1 M4.5 B
State Farm Mutual Automobile Insurance CoCommon Shares17.8 MB
Geode Capital Management LlcCommon Shares8.8 MB
Northern Trust CorpCommon Shares7.4 M1.6 B
Note, although Caterpillar's institutional investors appear to be way more sophisticated than retail investors, it remains unclear if professional active investment managers can reliably enhance risk-adjusted returns by an amount that exceeds fees and expenses.

Caterpillar Cash Flow Accounts

201720182019202020212022 (projected)
Capital Expenditure(1.17 B)(1.98 B)(1.52 B)(1.34 B)(1.21 B)(1.3 B)
Depreciation Amortization and Accretion2.88 B2.77 B2.58 B2.43 B2.35 B2.41 B
Net Cash Flow or Change in Cash and Cash Equivalents1.12 B(430 M)402 M1.07 B(103 M)(105.71 M)
Net Cash Flow Business Acquisitions and Disposals41 M(376 M)(6 M)(86 M)(454 M)(489.84 M)
Issuance Purchase of Equity Shares566 M(3.48 B)(3.81 B)(901 M)(2.53 B)(2.73 B)
Issuance Repayment of Debt Securities(2.38 B)1.84 B1.41 B(610 M)681 M765.2 M
Payment of Dividends and Other Cash Distributions(1.83 B)(1.95 B)(2.13 B)(2.24 B)(2.33 B)(2.52 B)
Net Cash Flow from Financing(3.66 B)(3.65 B)(4.54 B)(3.75 B)(4.19 B)(4.3 B)
Net Cash Flow from Investing(966 M)(3.21 B)(1.93 B)(1.49 B)(3.08 B)(3.33 B)
Net Cash Flow Investment Acquisitions and Disposals76 M(869 M)(382 M)10 M(1.5 B)(1.62 B)
Net Cash Flow from Operations5.71 B6.56 B6.91 B6.33 B7.2 B6.68 B
Effect of Exchange Rate Changes on Cash38 M(126 M)(44 M)(13 M)(29 M)(31.29 M)

Caterpillar Greeks

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Caterpillar or Industrials sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Caterpillar stock's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Caterpillar stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
α
Alpha over DOW
-0.1
β
Beta against DOW1.05
σ
Overall volatility
2.32
Ir
Information ratio -0.05

Caterpillar Volatility Alert

Caterpillar exhibits very low volatility with skewness of -0.55 and kurtosis of 0.32. However, we advise investors to further study Caterpillar technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Caterpillar's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Caterpillar's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Caterpillar Implied Volatility

Caterpillar's implied volatility exposes the market's sentiment of Caterpillar stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Caterpillar's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Caterpillar stock will not fluctuate a lot when Caterpillar's options are near their expiration.

Caterpillar Fundamentals Vs Peers

Comparing Caterpillar's fundamentals to the average values of its peers is one of the most widely used and accepted methods of equity analyses. It helps to analyze Caterpillar's direct or indirect competition across all of the common fundamentals between Caterpillar and the related equities. This way, we can detect undervalued stocks with similar characteristics as Caterpillar or determine the stocks which would be an excellent addition to an existing portfolio. Peer analysis of Caterpillar's fundamental indicators could also be used in its relative valuation, which is a method of valuing Caterpillar by comparing valuation metrics with those of similar companies.
    
 Better Than Average     
    
 Worse Than Average Compare Caterpillar to competition
FundamentalsCaterpillarPeer Average
Return On Equity38.55 %(0.31) %
Return On Asset6.38 %(0.14) %
Profit Margin12.33 %(1.27) %
Operating Margin20.04 %(5.51) %
Current Valuation143.62 B16.62 B
Shares Outstanding540.94 M571.82 M
Shares Owned by Insiders0.23 %10.09 %
Shares Owned by Institutions70.53 %39.21 %
Number of Shares Shorted5.02 M4.71 M
Price to Earning19.14 X28.72 X
Price to Book5.81 X9.51 X
Price to Sales1.84 X11.42 X
Revenue52.67 B9.43 B
Gross Profit13.19 B27.38 B
EBITDA10.55 B3.9 B
Net Income6.5 B570.98 M
Cash and Equivalents6.53 B2.7 B
Cash per Share12.21 X5.01 X
Total Debt37.58 B5.32 B
Debt to Equity2.20 %48.70 %
Current Ratio1.44 X2.16 X
Book Value Per Share30.81 X1.93 K
Cash Flow from Operations5.58 B971.22 M
Short Ratio1.51 X4.00 X
Earnings Per Share9.35 X3.12 X
Price to Earnings To Growth0.67 X4.89 X
Number of Employees107.7 K18.84 K
Beta0.93-0.15
Market Capitalization96.79 B19.03 B
Total Asset78.5 B29.47 B
Retained Earnings34.41 B9.33 B
Working Capital8.12 B1.48 B
Current Asset34.42 B9.34 B
   Acquisition by Gerald Johnson of 816 shares of Caterpillar subject to Rule 16b-3 [view details]

Caterpillar Market Momentum

Traders often use several daily momentume indicators to supplement a more traditional technical analysis when analyzing securities such as Caterpillar . With many different options, investors must choose the best indicators for them and familiarize themselves with how they work. We suggest combining traditional momentum indicators with more near-term forms of technical analysis such as Accumulation Distribution or Daily Balance Of Power. With their quantitative nature, daily value technical indicators can also be incorporated into your automated trading systems.
Accumulation Distribution143479.0
Daily Balance Of Power(0.06)
Rate Of Daily Change1.0
Day Median Price177.52
Day Typical Price177.78
Market Facilitation Index0.0
Price Action Indicator0.53

About Caterpillar Buy or Sell Advice

When is the right time to buy or sell Caterpillar? Buying financial instruments such as Caterpillar Stock isn't very hard. However, what challenging for most investors is doing it at the right time to beat the stock market. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities. Macroaxis provides hands-on modules to deliver winning trades and diversify your portfolios on a daily basis. Although Caterpillar investors may find it confusing at the beginning, most of our advising modules are very easy to use and apply.
Please read more on our stock advisor page.
 2019 2020 2021 2022 (projected)
Receivables17.9 B16.78 B17.38 B18.96 B
Inventories11.27 B11.4 B14.04 B14.19 B

Use Investing Ideas to Build Portfolios

In addition to having Caterpillar in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Toys Theme
Companies producing and distributing toys and different gaming products for kids. The Toys theme has 0 constituents.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Toys Theme or any other thematic opportunities.
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Continue to Caterpillar Analyst Recommendation to compare Macroaxis Buy or Sell Recommendation with the current analyst consensus. To check ratings for multiple equity instruments, please use the Instant Ratings tool. Note that the Caterpillar information on this page should be used as a complementary analysis to other Caterpillar's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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Is Caterpillar's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Caterpillar. If investors know Caterpillar will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Caterpillar listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.032
Market Capitalization
95.1 B
Quarterly Revenue Growth YOY
0.14
Return On Assets
0.063
Return On Equity
0.39
The market value of Caterpillar is measured differently than its book value, which is the value of Caterpillar that is recorded on the company's balance sheet. Investors also form their own opinion of Caterpillar's value that differs from its market value or its book value, called intrinsic value, which is Caterpillar's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Caterpillar's market value can be influenced by many factors that don't directly affect Caterpillar's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Caterpillar's value and its price as these two are different measures arrived at by different means. Investors typically determine Caterpillar value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Caterpillar's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.