Caterpillar (CAT) was and still is the reigning champion of the farm and construction industry! Today they have proven to the world that they can deliver even in a slow economy. Caterpillar came out blazing with a phenomenal quarter beating analysts’ estimates by $0.13 or roughly 12% higher than expectations. The number was $1.22 vs. $1.09 a share. 12% seems good, but what about comparing to this time last year? Caterpillar earned $1.22 vs. $0.64. That’s a 90.6% increase in earnings. A number like that is truly amazing!
Caterpillar beat estimates, had great revenue, and raised their guidance for the remainder of 2010. What more can you ask for? All of these positives point to a higher stock price for Caterpillar. Today was a day filled with profit taking. This stock is up over 38% since the beginning of the year. That’s a huge gain and it would be reckless not to take a little something off the table. A stock like this doesn't come around very often. Although, I haven’t had an opportunity to listen to the conference call, I believe CAT is on track to make even more money in 2011. Stay away for a bit as CAT should come down in price over the next couple of days or weeks. You would be safe to buy a little stock in low 70’s. If it gets into the 60’s you shouldn’t have a problem turning a profit for 2011. I’m going to listen to the call this weekend and I will have updates if I feel it’s of any interest.
Now that CAT has taken the thunder for the day I still have a couple of my favorites to mention. Apple (AAPL) came through big time. Earnings were spectacular and everything seems to be firing on all cylinders. Of course there is going to be people saying growth will slow and iPad sales weren't as robust as expected. Give me a break! Apple destroyed earnings! You’re not going to take the wind out of this sail. Apple will charge higher. I thought the stock was going to pull back big and it hasn’t yet. Maybe it won’t and this stock will continue higher. Personally I believe it should pull back into the $280’s and then move higher. That’s my opinion and I’m sticking to it!
Lastly, I want to briefly talk about Weatherford International (WFT).
Weatherford International has been traveling down a tough road. They did beat analysts’ estimates and I continue to have great confidence in this stock. WFT has positioned themselves nicely to take advantage of any changes that may occur in Mexico. Mexico was a huge bust for them in the 3rd quarter. Mexico turned sour after a political change prevented WFT from drilling this qtr. It’s all uphill from here in Mexico. I believe improvements in this country will allow earnings to exceed expectations in the coming quarters as this was the main driver for decreased revenue. Stuff happens! Even to the best companies. It’s a real positive to see a company deliver even when the cards are stacked against them. WFT is a buy in my book.
That’s it for today. I have some homework to do over the next few days to see what really is going on with CAT and AAPL.
Don’t forget Schlumberger (SLB) the oil service giant reports tomorrow. They are the market leader and many investors look to SLB for a reliable outlook for the future of oil.
Have a great night!
Clay-
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