In this video, MOtley Fool industrials analyst Blake Bos outlines what he sees as two interrelated risks facing Caterpillar (CAT +0.83%) today. First, Caterpillar is vulnerable to macroeconomics; it supplies equipment to cyclical industries and must anticipate slowdowns and upswings. Of late, it has not been particularly good at anticipating slowdowns, leaving the company with excess inventory. Second, much of Caterpillar's growth prospects are overseas, particularly in China and India, but this leaves Caterpillar vulnerable to currency fluctuations. Caterpillar also faces formidable competition from such companies as Komatsu that won't go away quietly in these markets.
Is this a risk to your investment in Caterpillar?
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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.