Jim/all, here's some info I researched while evaluating getting into CAT. As of now, I'm deciding to wait quite a while as next year looks significantly slower for CAT than this year's growth.
CAT's up 26.46% YTD (@ 47 1/2) and Year ending December's earnings are estimated to be 4.35 which is up 23% from last year. No problem there as the stock value appreciated right in line with the increase in earnings. However, the same source (E*trade) has Year ending Dec '98 with earnings of 4.60, up only 6% from this year, and I believe those estimates were certainly before the Asian impact. If that impacts 6% of their earnings, that brings the whole of next year to net 0 % growth and most likely 0% stock appreciation. Although CAT's current P/E of 11 looks like a good buy considering its 9 - 67 historical range, the Price to Book value of 3.6 is pricey given its 2.4 - 4.7 range. I haven't followed CAT very long, but if its stock moved up 26% on a 23% increase in earnings for the year, I'd expect it to stay flat with 0% earnings increase for next year, or drop a bit to a lower Price/Book while we see what future estimates look like, IMO. You might want to consider picking up some Boeing at dips under $50.
regards,
Tom |
