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!
Wednesday, August 8, 2012
Monday, July 23, 2012
Big Earnings Week For My Favorites!
Apple (AAPL) Reports tomorrow. Always a solid earnings report. If they beat earnings I expect a nice pop in after hours. Can the Monster of the stock market continue on? We will find out tomorrow after the market closes.
Weatherford International (WFT) reports tomorrow. Obviously, this stock hasn't had a very good run. The oil service giant SLB and BHI did fairly well because of international strength. The oil service companies usually trade together so I expect a good number from WFT.
Caterpillar (CAT) The Peoria Powerhouse! Cat reports on Wednesday 07/25/12. This one is a toss up. Cat hit a high of $116.95 on February 24th and is trading at a huge bargain. I still have confidence that CAT will prevail. Their earnings may disappoint with the downward pressure from the international markets, but I believe this news is already baked into the stock price. CAT is at rock bottom prices. That's all I'm going to say!
As usual I will be picking apart all three of these companies and will have a full report over the next few weeks on my take for the future of these companies.
Have a great night!
Clay-
Full Disclosure: I personally own CAT
Weatherford International (WFT) reports tomorrow. Obviously, this stock hasn't had a very good run. The oil service giant SLB and BHI did fairly well because of international strength. The oil service companies usually trade together so I expect a good number from WFT.
Caterpillar (CAT) The Peoria Powerhouse! Cat reports on Wednesday 07/25/12. This one is a toss up. Cat hit a high of $116.95 on February 24th and is trading at a huge bargain. I still have confidence that CAT will prevail. Their earnings may disappoint with the downward pressure from the international markets, but I believe this news is already baked into the stock price. CAT is at rock bottom prices. That's all I'm going to say!
As usual I will be picking apart all three of these companies and will have a full report over the next few weeks on my take for the future of these companies.
Have a great night!
Clay-
Full Disclosure: I personally own CAT
Wednesday, June 20, 2012
The Big Picture Of Investing
Over the past few weeks I've been thinking about investing as a whole. Why do people invest? Why don't people invest? What's the best way to invest? What's the best company to invest in? And the list goes on with all the questions that ran through my mind. I'm going to tell you what I think.
Investing in stocks is a way to leverage profits generated from great companies over many years in hopes for a nice return on your investment. Investing is a tool to reach your particular financial goal. Goals that may include saving for your children's college, supplemental income, funding for charity/programs and retirement. Of course I hear people say investing in stocks is risky! Those are usually the people that think investing in CD's and savings accounts is a good idea. Or they have no money because they own one of everything. That my friends is keeping up with the Joneses! I can address both of these issues and suggest a way to have your money working for you.
I don't mean to offend anyone that may own CD's or have a substantial amount of money in their savings account, but I believe investing in stocks is a better alternative.
I would never invest in CD's aka Certificate of Deposit. Never! Never! Never! Here's why.
Current Example: 10 yr CD Rate vs. stock that pays the same dividend yield
$10,000 investment
10 yr CD Rate 2.23% $10,000 would roughly turn into $12,467.62 That's about $246.76 a year.
Now you may say well if the rates are the same it should return the same amount of money. This is true, but stocks offer dividend reinvestment, appreciation in the stock price, and increased dividend payout. That's the game changer!
A stock that raises its dividend distribution 10% annually for 10 yrs would turn into $14,840.08 That's $2,372.46 more than the same amount of money invested. Almost double the money! Obviously doing this for 30-40 yrs would be substantial to your portfolio.
At 30 yrs $10,000 invested in a CD with a rate of 2.23% would turn into $19,379.87
30 yrs with a stock that pays a 2.23% dividend yield and raises dividend distribution 10% annually (Remember dividends are reinvested) turns into a whopping $433,637.11 Over 30 yrs annualized return with dividends reinvested equates to 13.39% return on your money.
Obviously, this is purely an example and is very realistic for a company to increase dividends at a rate of 10%. That means the CD investors are missing out on a lot of money! $400,000 of cold hard cash. Even if I'm off by a bit the return on dividend paying companies that increase their dividend payout consistently overtime will destroy a CD!!!!! The risk is well worth the reward...
CD rates will go up over the next 30 years, but you get the point!
The example above shows that $10,000 of your money has the potential to turn into something great! Using stocks as a vehicle to generate the money for you. Imagine trying to save $400,000 on your own. Let's say you made $50,000 a year and saved roughly 10% or $5000 per year. Without the help of an investment vehicle compounding over time it would take 80 years to save that kind of money. That means at my current age of 30 I would be able to save $400,000 by the time I'm 110. No thanks man!
Now as for a savings account the interest is much worse and I don't consider this an investment. A savings account is meant for emergencies and short term liquidity. Having 3-6 months of expenses in a savings account is the most anyone should have tied up in something that isn't keeping up with inflation. Once your savings is built I would put the rest of your money to work for you. Consider each dollar you save as an employee. Invest in assets not liabilities, whether it be equities, real estate, commodities etc etc.... Overtime your money will grow aka your employees and you will have a nice chunk of change generating income every year. Eventually, your money will create enough income to replace your earnings you bring in as an employee, which in turn leads to retirement! Retirement or a choice to do anything your heart desires... It's always great to have choices.
Lastly, the part of about keeping up with the Joneses is by far the biggest wealth destroyer. It's sad to see people deeply in debt because they want to impress their friends. Continually buying stuff that you can't afford over your lifetime will put you in the poor house. The only person you are making rich are the banks and credit card companies. The next time you buy something think to yourself do I really need this crap? Most of the time its a want and not a need. Buying toys overtime is good in moderation. Just think! Eventually your investments will generate enough income that you can go buy anything that you would like. Buying stuff you can't afford early on in life will dramatically slow down your opportunity to create tremendous wealth. I promise you that! I was that guy in college. I was so broke I couldn't even think straight! I have learned from my mistakes early on in my life and I'm grateful for that.
This is the reason why I'm so passionate about teaching others to invest for their future. The winning equation is to buy more assets than liabilities throughout our lives. That's it! Plain and simple.
Have a great night!
Clay
Full Disclosure
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!
Investing in stocks is a way to leverage profits generated from great companies over many years in hopes for a nice return on your investment. Investing is a tool to reach your particular financial goal. Goals that may include saving for your children's college, supplemental income, funding for charity/programs and retirement. Of course I hear people say investing in stocks is risky! Those are usually the people that think investing in CD's and savings accounts is a good idea. Or they have no money because they own one of everything. That my friends is keeping up with the Joneses! I can address both of these issues and suggest a way to have your money working for you.
I don't mean to offend anyone that may own CD's or have a substantial amount of money in their savings account, but I believe investing in stocks is a better alternative.
I would never invest in CD's aka Certificate of Deposit. Never! Never! Never! Here's why.
Current Example: 10 yr CD Rate vs. stock that pays the same dividend yield
$10,000 investment
10 yr CD Rate 2.23% $10,000 would roughly turn into $12,467.62 That's about $246.76 a year.
Now you may say well if the rates are the same it should return the same amount of money. This is true, but stocks offer dividend reinvestment, appreciation in the stock price, and increased dividend payout. That's the game changer!
A stock that raises its dividend distribution 10% annually for 10 yrs would turn into $14,840.08 That's $2,372.46 more than the same amount of money invested. Almost double the money! Obviously doing this for 30-40 yrs would be substantial to your portfolio.
At 30 yrs $10,000 invested in a CD with a rate of 2.23% would turn into $19,379.87
30 yrs with a stock that pays a 2.23% dividend yield and raises dividend distribution 10% annually (Remember dividends are reinvested) turns into a whopping $433,637.11 Over 30 yrs annualized return with dividends reinvested equates to 13.39% return on your money.
Obviously, this is purely an example and is very realistic for a company to increase dividends at a rate of 10%. That means the CD investors are missing out on a lot of money! $400,000 of cold hard cash. Even if I'm off by a bit the return on dividend paying companies that increase their dividend payout consistently overtime will destroy a CD!!!!! The risk is well worth the reward...
CD rates will go up over the next 30 years, but you get the point!
The example above shows that $10,000 of your money has the potential to turn into something great! Using stocks as a vehicle to generate the money for you. Imagine trying to save $400,000 on your own. Let's say you made $50,000 a year and saved roughly 10% or $5000 per year. Without the help of an investment vehicle compounding over time it would take 80 years to save that kind of money. That means at my current age of 30 I would be able to save $400,000 by the time I'm 110. No thanks man!
Now as for a savings account the interest is much worse and I don't consider this an investment. A savings account is meant for emergencies and short term liquidity. Having 3-6 months of expenses in a savings account is the most anyone should have tied up in something that isn't keeping up with inflation. Once your savings is built I would put the rest of your money to work for you. Consider each dollar you save as an employee. Invest in assets not liabilities, whether it be equities, real estate, commodities etc etc.... Overtime your money will grow aka your employees and you will have a nice chunk of change generating income every year. Eventually, your money will create enough income to replace your earnings you bring in as an employee, which in turn leads to retirement! Retirement or a choice to do anything your heart desires... It's always great to have choices.
Lastly, the part of about keeping up with the Joneses is by far the biggest wealth destroyer. It's sad to see people deeply in debt because they want to impress their friends. Continually buying stuff that you can't afford over your lifetime will put you in the poor house. The only person you are making rich are the banks and credit card companies. The next time you buy something think to yourself do I really need this crap? Most of the time its a want and not a need. Buying toys overtime is good in moderation. Just think! Eventually your investments will generate enough income that you can go buy anything that you would like. Buying stuff you can't afford early on in life will dramatically slow down your opportunity to create tremendous wealth. I promise you that! I was that guy in college. I was so broke I couldn't even think straight! I have learned from my mistakes early on in my life and I'm grateful for that.
This is the reason why I'm so passionate about teaching others to invest for their future. The winning equation is to buy more assets than liabilities throughout our lives. That's it! Plain and simple.
Have a great night!
Clay
Full Disclosure
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!
Wednesday, May 30, 2012
Brutal!!!
The stock market has been brutal! There is no place to hide lately. All I can tell you is to ride it out. Keep current with all the news on your current stock holdings. If everything is sound with your investments pay no attention to the outside noise. Europe is the biggest drag on the market and all stocks good or bad have been taken down. The only strategy that will help you lose less money is to shift your holdings into good dividend paying stocks. I on the other hand will continue to hold my high flyers. When the smoke clears the growth stocks will snap back the quickest. Until Europe gets it's act together the pain continues....
Clay-
Full Disclosure
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!
Clay-
Full Disclosure
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!
Wednesday, May 23, 2012
Westport Innovations +12.41% today
All I'm going to say is Westport Innovations (WPRT) up +30.70% in 4 days. Looks like some big money is flowing back into this growth machine. Keep a close eye on this fast mover.
Have a great night!
Clay-
Full Disclosure
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!
Have a great night!
Clay-
Full Disclosure
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!
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