04/22/2013

Is CAT out of the bag?

Is CAT out of the bag?

By Paul Price

CAT face imageGlobal heavy equipment manufacturer Caterpillar reported Q1 numbers this morning. To nobody's surprise profits were down 45% year-over-year to $1.31. Disappointing approximate numbers were pre-announced last week, prior to the official earnings release. That's why the shares had fallen to near a two-year low ahead of today's news.

Management now indicates about $7 in EPS is likely for the full year 2013.

Contrarian souls won't be shocked to learn that the bad news, which was expected, has allowed for the pre-market price of CAT to be higher than last Friday's closing quote.  As of 8:25 a.m. est, CAT was trading for about $81.28 /share. CAT went ex-dividend last Thursday for 52-cents per share. 

We added to CAT early last week and now hold a full position in Market Shadows' Virtual Value Portfolio.  We also sold a CAT put in Market Shadows' Virtual Put Selling Portfolio in Feb., 2013. 

 

Apr 22, 2013 12:00:00 AM | Newsletter Articles, Options, Value Investing

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I'm editor at Phil's Stock World, and editor for Stock World Weekly. My background is in the biological sciences, and law. After a brief career in the legal field, I changed directions and am now working as an editor, and very much enjoying my experiences in the editing world.

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