Don't Buy Caterpillar Before Checking Its Fundamentals!

By Harris Dyer • Wednesday, October 30 10:11 • Permanent Link

Caterpillar marked a -2.2% change today, compared to 0.0% for the S&P 500. Is it a good value at today's price of $378.94? Only an in-depth analysis can answer that question, but here are some facts that can give you an idea:

Caterpillar Inc. manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in worldwide.
Caterpillar belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 25.42 and an average price to book (P/B) of 3.2
The company's P/B ratio is 10.73
Caterpillar has a trailing 12 month Price to Earnings (P/E) ratio of 17.3 based on its trailing 12 month price to earnings (EPS) of $21.93 per share
Its forward P/E ratio is 16.8, based on its forward earnings per share (EPS) of $22.55
CAT has a Price to Earnings Growth (PEG) ratio of 3.81, which shows the company is overvalued when we factor growth into the price to earnings calculus.
Over the last four years, Caterpillar has averaged free cash flows of $6.72 Billion, which on average grew 15.2%
CAT's gross profit margins have averaged 14.3 % over the last four years and during this time they had a growth rate of 4.8 % and a coefficient of variability of 187.46 %.
Caterpillar has moved 67.2% over the last year compared to 37.6% for the S&P 500 -- a difference of 29.5%
CAT has an average analyst rating of hold and is 5.91% away from its mean target price of $357.78 per share

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.