Caterpillar-The Peoria Powerhouse

Less than a week ago I gave you  my take on Apple stock and now it's Caterpillar's turn!  That's right!  The Peoria Powerhouse.  Ticker symbol CAT

What I have learned from this phenomenal company is that business is good.  Business is so good that 2012 will be another year of growth for this company.  Growth is the easiest indicator pointing to higher stock prices in the future.  Now lets take a look at CAT's 4th qtr numbers and highlights.

-Record 2011 4th quarter revenues of $17.243 billion vs. 2010 revenues of $12.807 billion. 
-Revenue for the 4th quarter was 34.63% higher vs last year.  Truly amazing!
-4th quarter profit was $1.547 billion compared to $968 million this time last year
-EPS came in at $2.32, which is 57.82% higher than 2010 EPS of $1.47

Now let's take a look at the full year numbers

CAT's 2011 sales and revenues destroyed the 2010 numbers ($60.138 billion vs. $42.588 billion).  That's an increase of 41.20%!  On top of that profits for 2011 were 82.5% higher than 2010 coming in at $4.928 billion vs. $2.700 billion and full year EPS was $7.40 vs. $4.15 or a 78.3% increase.  I could really stop right here and tell you to buy this stock on the dips, but I have more to add to this wonderful earnings report. 

I promise this is the last list for the night.  Here are the remaining reasons I believe CAT will have another extraordinary year.

1. Raised full year 2012 sales and revenues to $68 to $72 billion (That's double digit growth)
2. Strong global demand for its products
3. Improved quality of products
4. Increased investment in product development
5. Integrate acquisitions and adding production capacity
6. 2011 produced record sales even with slow construction market in the US and Europe
7. Commodity prices are favorable, which means greater demand for engines and turbines for petroleum applications, as well as mining equipment.
8. Full time employees increased 20,609 from 2010.  125,099 employees vs. 104,490 in 2010.  Hiring is always a good sign for business!
9. Higher sales volume
10.  I saved the best for last.... Order backlog of $29.8 billion at the end of 2011.  That's an all time record for CAT!  That means the demand for CAT products is in full force.

In closing I believe CAT has plenty of room to run higher into 2012.  I would wait for a pull back say between $105-$110 before I would make an initial purchase.  That's a good starting point. 

Have a great night!

Clay-