Through TheFLY's Eyes: Caterpillar
from Joseph Lazzaro of Theflyonthewall.com
Caterpillar: The 'Rodney Dangerfield' Of Stocks
Just call Caterpillar (NYSE:CAT) the Rodney Dangerfield of stocks.
For those younger investors & readers who don't recognize the reference, the late Dangerfield [1921-2004] was a stand-up comedian who built a career by lamenting that, "I tell you I get no respect."
Likewise, Caterpillar gets no respect. Despite solid growth and impressive earnings for more than 3 years, Wall Street has pummeled the stock, taking shares down from about $82 in May 2006 to below $60, on the projection that the global economic slowdown will hurt CAT, maker of farm and construction machinery.
On Friday, however, CAT tried to reverse that sentiment by reporting Q4 EPS of $1.32, 2 cents below the Reuters consensus estimate of $1.34. CAT also posted Q4 revenue of $11.0B, well above the consensus estimate of $10.3B.
Prior to Friday, Wall Street had treated CAT the way Dangerfield felt he was treated: rudely - - taking CAT shares down despite repeated decent-to-good news reports and operational accomplishments.
However, on Friday, CAT started to receive a glimmer of warmth, as CAT shares rose $1.35 to $60.98 in mid-day trading.
Further, Prudential said Friday that CAT's November 2006 sales demonstrated robust overseas growth partially offset by continued moderation in the North American machinery market. Further, Prudential continues to believe that CAT's 2007 EPS guidance of $5.20-$5.70 is overly conservative.
An analyst's report underscoring CAT's robust overseas growth, and conservative EPS guidance? That sounds benign, even indicative of a tad of respect.
No doubt the late Mr. Dangerfield would be impressed.