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A Look at Caterpillar's Blowout Quarter

Submitted by Free Investing on Wed, 07/22/2009 - 05:47

Ryan Barnes submits:The Secular Trends Portfolio gobbled up a few more scraps of alpha Tuesday as largest holding Caterpillar (CAT) breezed past consensus estimates for $.22 per share in Q2. Net profit (that’s right folks, net) came in at $.60/sh, or $371 million. Ex-out the one-time restructuring costs and Caterpillar posted $.72, so it appears that the first quarter of 2009 will be the only one with a net loss. Considering the company’s leverage to early-business cycle activity, that’s an astounding feat. CAT shares are the destination of choice should they toss up a great quarter: They [CAT] have footprints in many businesses on the leading edge of the business cycle, so their comments tomorrow will very quickly determine if CAT shares will hit new highs for the year (around $42) or stay mired in the mid-30’s as has been their fate thus far. Caterpillar is the second-largest holding in the Secular Trends Portfolio, and barring a meltdown within the CAT Financial division, nothing will change the overweighting of this stock.Complete Story »