July 8, 2012
In today's edition, industrials editor and analyst Brendan Byrnes discusses Caterpillar and its 2.5% drop on Friday. The stock was one of the Dow's top performers earlier in the year but has been on a downward trajectory since the middle of April. Caterpillar has now dropped 6.6% on the year versus the Dow's 4.5% gain.
Poor jobs data on Friday combined with some negative news from Wells Fargo were the catalysts that dropped Caterpillar on Friday. Wells Fargo removed the stock from its "priority stock" list and lowered its price target after conducting channel checks, though it reiterated its outperform rating. In the following video, Brendan outlines why Caterpillar's current valuation provides an attractive entry point for the stock. The company is integrating acquisitions, including that of Bucyrus, its largest ever, which should help Cat realize higher margins in its resource segment, though it has a very capable competitor in Joy Global. Check out the video for more on why Caterpillar looks attractive at its current price.
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