Zacks Industry Rank Analysis Highlights: Caterpillar and Deere - Press Releases

By Dirk Van Dijk,CFA,

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For Immediate Release

Chicago, IL - January 12, 2012 - Stocks featured in this week's Zacks Industry Rank analysis include Caterpillar ( CAT ) and Deere ( DE ).

Zacks Industry Rank Analysis is written by Dirk Van Dijk, CFA, Chief Equity Strategist,

Machinery Running Smoothly

There are five separate Machinery "industries" that make the top 40 of Zacks' 258 Industries.  The best performing of them is the smallest by number of companies: The Industrial Automation/Robotics Industry, in 13th place -- representing an improvement of 8 spots since last week.  Its average Zacks Rank is 2.25, down (a good thing) from 2.50 last week.  

The next best is the Machine Tools Industry, with seven members and in 20th place -- slipping six spots from last week as its average rank rose to 2.43 from 2.29.  The Farm Machinery Industry also has seven members in it, and come in 30th place, a four spot improvement.  Its average rank was unchanged at 2.57.  
The largest of the five groups by far is the General Industrial Machinery group with 38 firms in it.  It is in 38th place, an 8-spot deterioration as the average rank increased to 2.61 from 2.45.  Filling out the group is Construction and Mining Machinery, an eight member group in 40th place, a huge improvement of 128 spots as the average rank plunged to 2.63 from 3.13.

If the Zacks Ranks were distributed randomly, one would expect that only 5% of the members of these "industries" would earn the coveted Zacks #1 Rank (Strong Buy).  Instead, 11 of the 64 (17.3%) have earned that distinction.  If it were random, only 15% would hold Zacks #2 Ranks (Buy) but actually 10, or 15.6%, hold it.

Some of the names on the lists below are large will know household names, such as Caterpillar ( CAT ) and Deere ( DE ), but there are also some very small firms as well.

The valuations are for the most part reasonable, and while I don't show the FY2 over FY1 growth on the tables, you can get a good idea of it by looking at how much lower the P/E for next year is relative to the P/E for this year.  Most are expecting solid, but not spectacular growth, and you are paying a reasonable price for those earnings.  Not rock bottom for the most part, but very reasonable.  

Most are seeing big increases in their estimates for both this year and next.  However, just as a word of warning, the smaller firms tend to be thinly covered, so an individual analyst raising his or her numbers for the firm has a much bigger impact on the mean estimate than is the case with the big well-covered companies.  Many of the firms pay at least some dividend, but most of the yields are relatively low.

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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Dirk Van Dijk, CFA
Phone: 312-265-9211

CATERPILLAR INC ( CAT ): Free Stock Analysis Report
DEERE & CO ( DE ): Free Stock Analysis Report
To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: CAT , DE

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