Caterpillar Q2 2012 Earnings Breakdown!

So I was able to put in a little work last weekend.  I listened to CAT and Westport's conference call.  Both calls were very positive.  I want to focus on Caterpillar's numbers tonight.  LOL!  Only because I wrote down the key stats of the call. Westport will come later.  Apple and Weatherford are still in the Que.  I can happily say all of these stocks are up quite substantially since the last time I wrote!

I know a lot of you are looking for a Westport (WPRT) update.  The progress towards natural gas infrastructure and the adoption of this phenomenal technology is gaining tremendous momentum!  If that isn't enough of a sneak peak, then all I can say is there was a reason for the +12.86% pop last Friday 08/03.  Westport has a great future!  I can say that my largest stake in all of my brokerage accounts is in Westport Innovations.  I'm putting my money where my mouth is!

Now let's move onto the Peoria Power House!  Better known as Caterpillar! (CAT)  Another great performance.  I wouldn't expect nothing less than greatness!

Let the list begin

-Had record quarterly profits. The highest profit in it's 87 year history
-yoy $2.54 eps vs. $1.52 (earnings per share) That's a 67.10% increase vs last year!
-Sales and Revenue came in at $17.374 billion vs. $14.230 billion (a 22.0% increase vs 2011)
-Full year outlook increased from $9.50 a share to $9.60 on roughly 68-70 billion in revenue
-Inventories decreased in China, as equipment has been allocated to other areas of the world
-Backlog of equipment is still at a solid $28.2 billion (An increase of 11% vs last year)
-Gas compression business is doing quite well
-Some mining equipment have lead times into 2014
-A 31% organic growth in mining

This is a small list that I derived from the call, but this is only the start.  From what I heard Caterpillar's management is confident in their earnings outlook through 2012.  They did provide caution in China and slow growth in United States and other areas of the world for 2012, but did mention they see a brighter future in 2013.  That being said we are investing for the future earnings!  With the continued monetary easing in China and other areas of the world CAT believes this will help improve the global economy, which should spark growth in the next 12-24 months.  With the current commodity prices many companies still continue to have an appetite for CAT's equipment.  The backlog is impressive and should be a positive indicator as to the strength of this company.

In my personal opinion CAT has more than came through this quarter.  Even with the economic headwinds this company was able to generate record profits.  The management is excellent and they know how to execute to create strong results.  Although caution was given the stock has been destroyed.  At $87.22 a share the stock is trading at a P/E of 9.75 vs the S&P 500 P/E of 14.6.  This is substantially lower.  CAT should easily be trading at the same P/E level as the S&P 500.  Put that into the equation and this stock would be trading at $130.00 a share.  Last earnings call I mentioned Caterpillar should be trading at $130.00 a share by year end and I believe it still has a chance.  If anything it should break through its 52 week high of $116.95 by year end.  A 35% price appreciation in the next 5 months is definitely not out of the question. 

In the end CAT is a steal at $87 a share and should be bought at these price levels.  Once it blows through $92 a share the momentum will carrier this solid company past the $100 mark and onto its 52 week high!  Plus the stock currently pays a dividend that provides a 2.40% yield

Currently I have a nice position in Caterpillar and plan on purchasing more in the near future.  I have confidence and so should you!

Have a great night!

Clay-

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Apple has done it again!

Apple continues to amaze me!  Here is the breakdown of their recent earnings report today.

-Record quarterly revenue of $46.33 Billion on profits of $13.06 Billion
-$46.33 Billion vs. last yrs results of $26.74 Billion equates to a 73.2% increase in revenues
-Gross margins were 44.7% vs. last yrs results of 38.5%

Sales Results by product

-37.04 million iPhone sold- 128% increase vs. last year
-15.43 million iPads sold- 111% increase vs. last year
-5.2 million Macs sold- 26% increase vs. last year
-15.4 million iPods sold- 21% decrease vs. last year

-Numbers were derived from apple.com

On the surface Apple looks extremely strong, but I still must listen to the conference call.  I did hear on the way home from work that Apple may have a plan for the large amount of cash they have on hand.  That current number is a solid $97.7 Billion.  My vote is to pay out a dividend to all of the loyal shareholders!!! LOL! 

Apple is trading at $451.20 a share in after hours.  Up +7.34% Another 52 week high

It seems like the 52 week high trend continues when I'm out of my favorite stocks.  I have 0 shares of Apple (AAPL) at the moment.  Oh wait!  And I have 0 shares of Westport Innovations (WPRT), which conveniently hit a 52 week high as well closing at $38.06 a share.  Up +6.91% on huge volume.  It appears the big boys are betting Westport is going to go higher.  I'm guessing that with the current prices of natural gas vs. oil prices that natural gas is becoming very enticing.  Enticing as a bridge fuel to replace the reliance of crude oil.  It just so happens that President Obama will be addressing energy and job concerns tonight at 9:00pm.  The State Of The Union Address could uncover the recent upside action in Westport today. 

Congratulations to those that own Apple and Westport as of today.  I know someone is making money! 

P.S. Weatherford is currently on my radar.

Happy Trading!

Clay-

Sidelined For Earnings Season!

So Westport (WPRT) proved me wrong as the stock was playing tricks on me closing up +5.02% today!  This stock has been a firecracker since the beginning of December and yet it still pushes higher.  I love this company, but I can't comprehend as to why the stock continues higher.  I haven't seen any type of catalyst for Westport and I can't back this stock at the current price.  I can't really back any stock at the current price levels.

I'm holding strong on the sidelines with plenty of cash to invest, but I haven't had an opportunity to get back in.  I'm going absolutely crazy right now! I missed my opportunity to get back into WFT yesterday as I was going to play the oil service earnings of Schlumberger (SLB) on Friday.  SLB earnings determines the direction of the oil service companies.  If SLB is positive the rest of the competition goes up as well.  With Weatheford up +5.96% today it would an idiotic move to chase this stock into Friday. 

Another key move that I missed was Caterpillar (CAT) as the stock has moved up +13.56% from the last day I was in the market with my Monster Portfolio.  12/22/11 is the date.  That's right I have been out of the market since 12/22/11. 

The only thing I can do now is listen to all of the conference calls to determine my next investment opportunity.  The best thing I can do is be patient.  Right? 

Earnings Calendar-  Here is a helpful link to get the dates on the upcoming earnings releases

http://biz.yahoo.com/research/earncal/today.html pulled from Yahoo Finance 

I will be listening to the conference call on the following companies

SLB Earnings 01/20/2012

AAPL Earnings 01/24/2012  52 Week High today...

CAT Earnings 01/26/2012

WFT Earnings 02/21/2012

Have a great night!

"When in doubt buy more"

Clay-

Stay Cautious!!!

Hello Everyone! 

The message for today is to not get to excited!  The market has been performing very well since the beginning of the New Year, but I believe many stocks are in overbought status.  I'm basing this solely off technical analysis.  The charts are telling me that in the near future we could have a pull back to lower prices. 

I can honestly say that I have been out of the market for the past few weeks and have missed a portion of the upside.  There were a few stocks that I had my eye on, but I was unable to get in at a good price.  If you currently have any major gains it would be a good idea to lock in some profits over the next few days.  Currently I'm not a buyer of any of my favorite stocks at the moment.

Lower prices= increased activity for me. LOL! 

I can disclose that I sold Apple (AAPL) and Weatherford (WFT) over the past 2 days in another account.  I was able to lock in a nice +8.14% gain after fees in Apple which I bought at $388.36 a share back on 11/15/11 and sold out yesterday 01/09/12 at $424.81.  In regards to WFT I was able to make a solid +14.88% return off of my money.  I bought WFT on 12/19/11 at $13.48 a share and sold out today 01/10/12 at $15.87.  I was trying to put more money into WFT, but I was never given an opportunity after that day. 

Needless to say my accounts are filled with a majority of cash and I'm itching to buy anything that comes my way!  

In the end be patient and never be overly excited when your stocks run up.  Sell into strength and continue to look for the next investment opportunity! Earnings season is here and there is a lot of uncertainty of how companies are doing.  Pay attention to your favorite stocks and listen to the conference calls...

I have my eye on Westport (WPRT) at the moment.  The stock has been holding pretty strong.  I thought it would have sold off by now.  I will have to wait and see.

Happy Trading!

Also, I attached my video blog link from last week.  I ran into some technical difficulties if anyone missed it!

Monster Portfolio Year End Results 2011

https://www.youtube.com/watch?v=6XGA8vURBL8

Clay-

Portfolio Trade Action! WPRT

I bought some Westport Innovations (WPRT) today!  I tried to pick some up on Friday, but my order came in a little low and I missed about a 6% price move.  I listened to Westport's conference call last week and I really liked what they had to say.  I'll explain a few details tomorrow. 

Weatheford (WFT) up 3.03% today. Keep the money flowing!  Although I decreased my stake in WFT I'm still very happy with the outcome.

Clay-

Monster Portfolio Week 42 Results

MONSTER PORTFOLIO 2011

Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 41 10/28/11
$1,506.05 Stock
$1,059.87 Cash
Total $2,565.92

Since Inception: -1.53%

Back out cash inflow and we have a balance of $1,960.42. 

Welcome back everyone!  So I was able to dig into Weatherford’s (WFT) 3^rd qtr. earnings transcript last week and I’m here to say that WFT appears to be doing all of the right things. (All of the right things that are within their control.)  The positives outweigh the negatives.  First I will cover the negatives to get them out of the way.  These are the issues that negatively impacted their earnings.

Negatives

1.      An increase in the effective tax rate reduced the earnings by $0.01

2.      Foreign exchange book losses accounted for a $0.03 hit against earnings

3.      Middle East, North Africa, and Asia Pacific revenue declined $45 million due to increased start up costs in Saudi Arabia, Kuwait and Iraq, contracts in Algeria lapsed and WFT was forced to demobilize and relocate outside of the country, and lastly higher incurred costs in Iraq due to shut down costs, idling costs, and problems with recent started operations

4.      Net debt increased roughly $301 million for a grand total of $7.3 billion in debt

Positives

1.      Quarterly revenue reached a record high of $3.4 billion

2.      Year on year revenue growth of 33%

3.      Sequential quarterly growth of 11% (Always a positive to see revs higher on back to back quarters.)

4.      Continued positive outlook for North America (Conservatively)

5.      Positive outlook for Canada which has lagged for years

6.      Increasing margins and volume in certain product lines including artificial lift, production optimization, formation evaluation, and open hole completion for North America in 2012

7.      Positive outlook in Latin America, Russian, and European operations

8.      Increased activity in North Africa (Libya and Algeria)

9.      Margin improvements internationally for the 4th qtr. and strengthening into 2012

10.  15-20% of North America earnings is from fracking, which means more room for growth

In conclusion of the earnings I still continue to believe that WFT is a viable investment.  There is much room for improvement!  That being said I believe Weatherford is on the right track to increase revenue and improve their operations.  The one thing that is a slight concern is the increased debt, but as a company grows to increase market share in a competitive industry taking on debt to grow is quite normal.  If the debt to equity continues to increase passed Q3 of 2012 I may change my tune.  So my recommendation is to continue to buy WFT on the dips well into 2012 as the strength in earnings will continue with elevated crude prices.

I would also like to disclose that I sold a large stake in WFT on Thursday and Friday as selling into strength is what I do.  This was mostly because I had to much invested in WFT and I had to reduce my risk.  Since October 4^th Weatherford has increased in value by 35.97% as of Friday’s close.  A run like that deserves a little profit taking.  You have to lock in your profits while the gettin is good!  Remember I try to think like the big fund managers. And currently they are selling as we saw some profit taking today.  My objective is to make as much money as I can while reducing my risk along the way!

Westport Innovations (WPRT) reports tomorrow.  Depending on the outlook I may try to sneak back into the speculative alternative energy play for the remainder of the year.  I still have a goal to finish up 10% on the year and I have to pick my stocks wisely as I’m running out of time. LOL!


All research was derived from Weatherford’s website and can be viewed by clicking on WFT (hyperlinked)

Have a great night! 

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

Monster Portfolio Week 40 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 39 10/14/11

$2,485.66 Stock
$12.05 Cash
Total $2,497.71

Since Inception: -4.96%

Back out cash inflow and we have a balance of $1,892.21. 

It was a very productive week for the stock market last week.  My portfolio performed amazingly!  With the strong movement in Apple (AAPL) and Weatherford (WFT) I was able to gain +14.19% vs. last week.  Yes that is a big run, but I believe my portfolio still has great upward potential.  Apple reports tomorrow and I expect nothing less than another strong quarter.  I’m interested to see if they have anything up and coming in the pipeline.  The iPhone 4S was a big hit as they reported selling more than 4 million phones in 3 days.  That is ridiculous!  That is all the information I need to confirm that this stock should be a solid investment for many quarters to come.

As for Weatherford I base my assumptions on the other oil service companies and their financial results.  Halliburton (HAL) reported strong earnings topping analyst estimates earnings with a 2 cent beat (0.94 vs. 0.92)   Though the stock sold off today I believe the energy bull market is here to stay.  The company to pay attention to is Schlumberger (SLB) as they are largest and most influential oil Service Company.  They set the trend.  SLB reports on Friday.   I believe HAL and SLB will help Weatherford have a short term pop to the upside over the next few days leading into earnings.  If this happens I will be selling a portion of my holdings into strength.  If I’m wrong I expect WFT to trade basically flat line/slightly lower and then pop on the day of earnings. WFT reports on Tuesday 10/25 so there are 6 more trading days to go!  I will be selling one way or another as my portfolio is highly leveraged with WFT.  I have to protect my portfolio in the short term.

P.S.  another great indicator that energy is here to stay is the recent announcement of Kinder Morgan Energy Partners (KMP) to acquire EL Paso Corp (EP) for $38 Billion to create the largest natural gas pipeline system in North America.  KMP popped +5.08%  Energy=$$$

Clay-

“When in doubt buy more!”

Current Holdings:

Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

Monster Portfolio Week 39 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 38 10/07/11

$2,203.18 Stock
$12.05 Cash
Total $2,215.13

Since Inception: -19.15%

Up +3.29% vs last week

Back out cash inflow and we have a balance of $1,609.73. 

It has been a rough couple of months, but the last few days of seeing strong buying in stocks has regained my confidence that the market has found some footing. With earnings kicking off today I expect a strong earnings season and stock prices to move much higher.  Prices to where they should be! (Even though Alcoa (AA) reported lackluster numbers today)  I have been waiting patiently for institutional investors to finally come to their senses and start buying great company stock.

I have seen the momentum change since last Tuesday.  Apple (AAPL) and Weatherford (WFT) are great examples of money flowing back into great companies. Apple has moved +7.46% since last Tuesday and Weatherford is up +15.60%.  Both companies are ready to explode higher!  Every week I have something to say about Apple and Weatherford, but that is because that is where my money is at. I only invest my money in what I believe is the best opportunity for capital appreciation!  Oil Service and Technology is where it’s at.

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

Monster Portfolio Week 38 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 36 09/30/11

$2,137.62 Stock
$12.05 Cash
Total $2,149.67

Since Inception: -22.44%

Back out cash inflow and we have a balance of $1,544.17. 

It appears the stock market has tricked my logic once again!  When I can’t imagine stocks going lower, another brutal week occurs.  I apologize for anyone that has lost money with my advice, but frankly this market is out of control.  The looming issues in Europe have pored over into the U.S. equity market.  No stock was left untouched.  Investing has become a loser’s game in the short term.  I’m at the point where I have to stick to my stock picks and grind it out. 

I almost unloaded Apple (AAPL) today to bet the farm on Weatherford (WFT), but decided against that.  My bet would have worked out, but to sell Apple well off its high just didn’t feel right.  And I was a little upset that Apple didn’t release the iPhone 5.  LOL!  They did however introduce the new iPhone 4S, which looks identical to the iPhone 4, but with added features including a faster processer, new 8MP camera, IOS 5, iCloud, and the new intelligent phone assistant Siri.  Even though the iPhone 5 didn’t release today the new and improved iPhone 4S should help drive even higher sales for the iPhone.  My wife recently purchased an iPhone 4 and I have to say the phone is pretty sweet!

In closing please don’t lose faith in the stock market.  The last minute rally today in the market gave me hope that the trend will soon change.  Stocks are currently hostage to Europe, but I believe this issue will be addressed sooner than later.

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)

Monster Portfolio Week 36 Results

MONSTER PORTFOLIO 2011


Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97

Balance: End of Week 35 09/16/11

$2,413.95 Stock
$100.38 Cash
Total $2,514.33

Since Inception: -4.13%

Back out cash inflow and we have a balance of $1,908.83. 

Last week was great for my portfolio as I cut my losses from being down -9.52% to close Friday down slightly at -4.13%.  That’s a +5.39% to the upside.  Yesterday seemed as if I would continue to make money, but my excitement was tempered by the last few hours of trading today.  With the Fed talking to tomorrow sell offs late in the day are normal. 

I did however enjoy  Apple (AAPL) continuing on hitting another 52 week high closing at $413.45 a share.  Even though Apple has been on a phenomenal run I believe this stock will continue higher.  Weatherford (WFT) on the other hand is driving me crazy!  My confidence is extremely high with WFT, but yet this stock doesn’t want to budge.  I’m not sure what is holding up the oil service stocks, but the selling cannot last.  It won’t!  The demand for oil is still strong. Oil service is a long term trend and I’m not backing down from WFT.  If anyone has money to put to work, that is where I would go.  WFT! WFT! At $15.56 a share this stock is a steal.  I liked it at $20.00 a share.  So if you buy it now you will have a solid gain in excess of 25% by the time it reaches $20.  That’s right you have a huge advantage on me! 

P.S. Westport (WPRT) is slightly up from when I advised to sell on Thursday and today was the first sign of weakness.  Please stay away.

Clay-

“When in doubt buy more!”

Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)