) shares attained a 52-week high of $96.68 during intraday
trading on Feb 14, finally closing lower at $96.55. Caterpillar
had touched this level exactly a year back on Feb 14, 2013.
The company has delivered a year-to-date return of about 7%,
outperforming the S&P return of a negative 0.26%. Caterpillar
has a market cap of $61.5 billion. Average volume of shares
traded over the last three months was approximately 5,944K.
Caterpillar has long-term estimated earnings per share growth
rate of 8.5%.
What's Driving Caterpillar?
After a dismal run in 2013, it has been a good year for the
mining and equipment behemoth so far, as it gained 12% since
reporting its fourth quarter earnings on Jan 27. The share price
further found support as news of renewed investments in Northern
Ireland and share repurchases came in.
Caterpillar's fourth quarter results were phenomenal as it marked
the first year-over-year earnings improvement in 2013 and broke
the jinx of four consecutive negative earnings surprises. Even
though revenues declined 10% in the quarter to $14.4 billion,
Caterpillar delivered a 48% rise in its earnings to $1.54 per
share helped by its focus on cost reduction. Despite a tumultuous
year, Caterpillar continued to deliver strong cash flow and
reward shareholders though dividend hikes and share repurchases.
Caterpillar expects revenues in 2014 to be flat with 2013 levels,
up or down 5%. Excluding restructuring costs, earnings per share
are expected at $5.85. Construction Industries and Power Systems
are expected to deliver sales growth on the back of economic
growth. However, sales in Resource Industries will continue to be
challenging, as mining companies keep cutting their pockets with
lower capital expenditures planned for 2014.
Caterpillar is all set to reap the benefits of its cost reduction
activities, namely, shifting production between certain
facilities, rationalization of its smaller facilities and
workforce reductions. Also, improving economic conditions,
especially in China, and recovery in the construction sector
could be catalysts for Caterpillar.
Other Stocks to Consider
Caterpillar currently retains a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same sector include
The Manitowoc Company, Inc.
Zebra Technologies Corp.
). While Manitowoc carries a Zacks Rank #1 (Strong Buy), Terex
and Zebra Technologies hold a Zacks Rank #2 (Buy).
CATERPILLAR INC (CAT): Free Stock Analysis
MANITOWOC INC (MTW): Free Stock Analysis
TEREX CORP (TEX): Free Stock Analysis Report
ZEBRA TECH CL A (ZBRA): Free Stock Analysis
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