Caterpillar stock: buy or sell?
Updated on:
Dec 1st, 2020
2
Caterpillar stock brief
- Caterpillar only changed a -0.19% after making new all-time highs on November 24
- With the recent gains, Caterpillar is approaching to new all-time highs again, that are now just 2.84% above the current trading
- Caterpillar Inc. manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines.
Should I buy Caterpillar stock?
All successful traders recommend adhering to a trading strategy and not make decisions based on subjective opinions, rumors or feelings. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best
Is $CAT stock a buy?
In the current situation of Caterpillar there is just one buy setup eligible:
Uptrend buy setup
Caterpillar stock is in an uptrend since last May that so far marked a gorgeous 75.00% gain. Price marked a local bottom in this uptrend at $149.63 last October, and since then it bounced off a 15.79%. Price just broke out above the entry point at $170.65, but it's still eligible. If price climbs beyond $179.18, it would be better to wait to another pullback. If you decide to enter this trade, the suggested stop loss is at $153.59
| Buy setup | Buy point | Stop loss | Risk |
| Uptrend buy setup | $170.65 | $153.59 | 10.00% |
Should I sell Caterpillar stock?
Do you know when is it time to sell Caterpillar stock?. Trading strategies prevent us from making rash decisions based on our moods or the noise surrounding the market. Our trading system selects very simple setups to guide us on when is the best moment to sell a stock. Be aware that these setups are not intended for selling short Caterpillar stock
As a rule of thumb, you must never mantain an investment that results in greater losses than those expected at the time of purchase. The moment to sell shares always has to be dictated by the stop-loss (automatic or manual)
Is it time to sell Caterpillar stock?
Currently, Caterpillar stock doesn't match any of our preferred sell setups, so if you own Caterpillar stock and your operation is in profit probably is not time to sell now
Caterpillar ratings
In the last month, just one rating was published for Caterpillar
| Brokerage firm | Rating |
|---|---|
| Nov 19th, 2020 | |
| JPMorgan Chase & Co. | Buy |
Caterpillar stock analysis
Caterpillar shares started an uptrend last May, and grew an amazing 75.24%. During this uptrend, the price provided some entry points on the breakouts. Latest low was last October, when price bounced at $149.63. Caterpillar broke out above $170.65 (its last top) in mid-November. That breakout was a good buy point
$CAT at All-time Highs
Caterpillar reached new all-time highs (ATH) on November 24 at $178.32, and cleared the field for new highs as there are no further resistances. Previous highs were in early November
SMAs overview
Supports and resistances
Price is at highs and there are not upper resistance levels.
The current support levels are:
Bollinger bands
Relative strength index
The RSI dropped below the overbought level of 70 last October after just crossing to the overbough zone for just one day (weak signal). The RSI value on Tuesday was 57.4. Since then, Caterpillar stock skyrocketed a 2.77%
Caterpillar stock price history
Caterpillar IPO was on Jan 2nd, 1962 priced at $0.13 per share1. Since then, CAT stock has risen by 133,176.92%, with an average of 2,296.15% per year. If you had invested $1,000USD in Caterpillar stock at that time, it would worth $1,332,769.23 today.
1: Adjusted price after possible price splits or reverse-splits
Price target for Caterpillar stock
Nobody can predict how much a share will be priced in the future. Banks and financial organisations post their analysis forecasting how a stock will performance in the future.
Along with buy or sell recommendations, financial institutions release their price target based on the stock price action and the company fundamental data. Most of these predictions follow the publication of new financial data by the company, and usually. If you are a small trader you don't have to invest based on these projections.
There is just one price target available for Caterpillar that predicts a price of $185.00.
| Brokerage firm | Price target |
|---|---|
| Nov 19th, 2020 | |
| JPMorgan Chase & Co. | $178.00 → $185.00 |
Earnings and financials
Last October, Caterpillar Inc. ($CAT) reported EPS for that significantly enhanced Wall St. expectations. Quarterly EPS was $1.34 per share versus the estimated $1.12. This Q3 report means an earnings surprise of 19.64%. On the contrary, the company reported revenue for this quarter was $9.9 billion consistent with the market estimates.
Same quarter one year ago, reported EPS was $2.66, so current EPS is a drop of -49.62%. Looking at turnover, figures collapsed a -22.55% compared to $127.6B same quarter a year ago.Caterpillar ($CAT) is presenting earnings report late next January. Expected for this quarter is $1.46, compared to $1.34 that was reported for Q3.
Caterpillar competitors
Caterpillar belongs to the Industrials sector and the Farm & Heavy Construction Machinery industry, where it has 15 industry peers.
Caterpillar main competitors are:
| Company | Market cap | Rating | Bullish ratings1 |
|---|---|---|---|
| Caterpillar ($CAT) | $93.6B | Buy | 1 |
| Deere ($DE) | $81.5B | Buy | 7 |
| PACCAR ($PCAR) | $31.1B | Neutral | 0 |
| CNH Industrial ($CNHI) | $14.2B | Buy | 1 |
| AGCO ($AGCO) | $6.9B | Buy | 1 |
| Oshkosh Corporation (Holding Company) ($OSK) | $5.7B | Neutral | 0 |
| Navistar International ($NAV) | $4.4B | Neutral | 0 |
1 In the last 30 days.
Caterpillar performance
To better understand Caterpillar stock performance you must compare its gains with other related stocks in same sector or industry.. For Caterpillar, the benchmark is made against Deere, PACCAR, CNH Industrial, AGCO, Oshkosh Corporation (Holding Company) and Navistar International.
| Company | 1m | 3m | 6m |
|---|---|---|---|
| Caterpillar ($CAT) | 8.80% | 18.70% | 40.00% |
| Deere ($DE) | 14.90% | 25.90% | 70.10% |
| PACCAR ($PCAR) | 2.70% | 1.60% | 18.80% |
| CNH Industrial ($CNHI) | 39.80% | 40.90% | 56.30% |
| AGCO ($AGCO) | 20.10% | 31.20% | 59.40% |
| Oshkosh Corporation (Holding Company) ($OSK) | 17.50% | 5.20% | 9.40% |
| Navistar International ($NAV) | 3.80% | 38.40% | 81.00% |
Important note:
The opinions written in this article are personal and should not be followed as recommendations for you to buy or sell shares. The author of this document does not have an understanding of the specific circumstances of the reader, his or her financial statements or what is in his or her best interest at any given time. All users should speak with their financial advisor before buying or selling any securities Opinions are published for general educational motives onlyCaterpillar summary
| Tuesday, December 1st, 2020 | |
|---|---|
| Open | $175.39 |
| Close | $173.26 |
| Day range | $172.94 - $176.56 |
| Previous close | $173.59 |
| Session gain | -0.19% |
| Average true range | $3.59 |
| 50d mov avg | $161.78 |
| 100d mov avg | $151.03 |
| 200d mov avg | $133.27 |
| Earnings date | January 29th, 2021 |