Inventory is the name of the game for Caterpillar (NYSE: CAT) investors. In this video, Blake Bos describes the inventory problems facing Caterpillar. Two key metrics measure inventory status: inventory turnover (the bigger the better), and inventory outstanding (the smaller the better). In 2002, Caterpillar had a turnover of 5.9 times, and outstanding of 68 days. For the past year, it was 3.37 times, and 108 days. The past quarter was slightly worse. These are below the performance of such companies as Deere or Cummins. When Caterpillar's earnings announcement comes, be sure to watch these metrics. Caterpillar has been trying to move inventory, but the stock has been held back because of it. The upcoming report should shed some light as to how successful Caterpillar has been in dealing with its inventory.
Caterpillar's stock has been really lackluster recently. Can it deliver for investors this quarter?
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A home grown Kansan and largely self taught investor. I wouldn't classify myself by any particular investing style, just opportunistic. My dream investment would have a greater than 10% free cash flow return on enterprise value and be growing at above industry average rates. Some of my favorite industries to watch right now are: alternative energy, manufacturing, agriculture, infrastructure, and media content production companies. Follow me on any of the social media websites below for the most important 3D printing industry developments and other great stories.