Construction and mining equipment giant Caterpillar (
) was a very different beast at its analyst day in Vegas compared
to in 2011.
Last year Caterpillar were cheerleaders for the global mining
boom and recovery, after being cautious in 2010 after
an apocalyptic 2008-2009. Last year CAT were
concerned about capacity and meeting demand.
This year is a different story. Caterpillar is more sanguine,
but not saying the world is dead and definitely not calling for
the end of China.
With moderate world growth, CAT will focus on being more
profitable, much like in 2009.
To do this they have said they will cut R&D, investment,
and M&A -- which sounds a lot like
) on the outlook for their new mining project.
Caterpillar's inventory has been a huge overhang to the stock.
Cat dealers in South America and China are the major problem as
they are holding off on purchases, although this is turning in
Brazil. Our guys on the ground say locals are priming for major
CAT sees "better sales growth" in 2014 & 2015 due to
"healing" U.S. & European construction, and modest emerging
Ultimately Caterpillar sees enough global improvement and
sufficient economic growth to support growth in the mining and
What does all this mean? Simple. Buy China, buy miners, and
buy CAT on any major weakness here.
- Has major technical buy set ups.
- Golden week next week has historically been met with
- The transfer of power in mid-October is going to grease the
- There were record reverse repos last night to pump up the
- Buy China Mobile (
Teck Cominco (
): copper, metal, coal, gold, molly -- and featuring a 2.6%
Norlisk Nickel (
) in Russia.
Tune in to CNBC at 10:20am this morning for the full