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.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Caterpillar's stock has been really lackluster recently. Can it deliver for investors this quarter?
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Our Most Popular Articles
Premium Investing Services
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.