Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (33384)	2/2/2009 5:50:31 PM
From: E_K_S	Read Replies (1) \| Respond to of 78670

Hi Spekulatius - Lots of recent Put volume on CAT Caterpillar Buried Under Heavy Put Volume Construction equipment firm's options traders pile into put options by Joseph Hargett (jhargett@sir-inc.com) 2/2/2009 1:42 PM schaeffersresearch.com From the article:"...Looking to speculate on a continued decline in CAT shares, options traders have piled into puts today. So far, more than 36,000 CAT puts have crossed the tape, more than tripling the stock's average daily put volume and placing the shares on our Intraday Volume Explosion List. Nearly all of this activity was centered at the February 25 and February 30 strikes. The vast majority of the February 25 puts changed hands at the bid price, while the February 30 puts mostly traded at the ask price. This activity appears to be a bearishly oriented spread...." ================================================================== CAT last cut their dividend by 50% on January 14, 1992 and was selling at a price adjusted amount of $6.50/share. After this cut, the company had 16 years of dividend payments with 15 increases and three 2:1 stock splits. The stock peeked (w/i the last 52 weeks) at $85.96. A 14 bagger in 16 years. finance.yahoo.com If things get bad, I expect the company to cut their dividend by 50% to $.22/share per quarter. This would be what they were paying in 2005. In fact if the company cut their dividend by 75%, it would only be at the rate they were paying in 1997. It appears that the market is looking for CAT to move lower, perhaps below $25/share. I will be watching for a dividend cut and a spike in selling volume to signal to me that a potential bottom has been reached. This might be a good entry point to start a small position. EKS