Caterpillar Stock Analysis

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Information about Caterpillar Stock Analysis

Published on December 16, 2007

Author: eonemo

Source: slideshare.net

Stock Analysis

Team Members Louis-Philippe Edger Gad Elharrar Nicolas Murcia Joseph de la Plante

Presentation Overview COMPANY OVERVIEW INDUSTRY PROFILE SWOT ANALYSIS FINANCIAL ANALYSIS RECOMMENDATION

COMPANY OVERVIEW

INDUSTRY PROFILE

SWOT ANALYSIS

FINANCIAL ANALYSIS

RECOMMENDATION

Company Profile Core Business: Machinery & Equipment Engines Financial Products After Market Services 50% of sales overseas Market Capitalization: 43B$

Core Business:

Machinery & Equipment

Engines

Financial Products

After Market Services

50% of sales overseas

Market Capitalization: 43B$

Industry Overview Capital Intensive Highly Cyclical Recently: Renewed investment in mining and industrial sectors Weak Housing Market Emissions standards

Capital Intensive

Highly Cyclical

Recently: Renewed investment in mining and industrial sectors

Weak Housing Market

Emissions standards

SWOT Analysis STRENGTHS: Good Customer Service; After-sales for the heavy industry Worldwide Loyal Customers; 44% overseas sales Diversified product line with the first electrical powered heavy machine Large buy backs: $7.5 billion in stock Factors stimulating sales: increasing mining, and oil and gas exploration activities Distribution system; mostly dealerships are independent and locally owned Important stock capitalization

STRENGTHS:

Good Customer Service; After-sales for the heavy industry

Worldwide Loyal Customers; 44% overseas sales

Diversified product line with the first electrical powered heavy machine

Large buy backs: $7.5 billion in stock

Factors stimulating sales: increasing mining, and oil and gas exploration activities

Distribution system; mostly dealerships are independent and locally owned

Important stock capitalization

SWOT Analysis WEAKNESSES: Slow down in the US housing market with increasing inflation Critical Debt to equity ratio Truck engine demand US Recession would reduce demand for Asian manufactured goods, and therefore affect foreign corporate spending on Caterpillar products

WEAKNESSES:

Slow down in the US housing market with increasing inflation

Critical Debt to equity ratio

Truck engine demand

US Recession would reduce demand for Asian manufactured goods, and therefore affect foreign corporate spending on Caterpillar products

SWOT Analysis Opportunities: Slow down in the US housing market with increasing inflation Critical Debt to equity ratio Truck engine demand US Recession would reduce demand for Asian manufactured goods, and therefore affect foreign corporate spending on Caterpillar products

Opportunities:

Slow down in the US housing market with increasing inflation

Critical Debt to equity ratio

Truck engine demand

US Recession would reduce demand for Asian manufactured goods, and therefore affect foreign corporate spending on Caterpillar products

SWOT Analysis THREATS: Legislation against toxic mission (LR: Carbone Dioxide) Hard to liquid assets Strong global competitors: Komatsu Ltd., Volvo Group AB, Hitachi Construction Machinery Co

THREATS:

Legislation against toxic mission (LR: Carbone Dioxide)

Hard to liquid assets

Strong global competitors: Komatsu Ltd., Volvo Group AB, Hitachi Construction Machinery Co

Ratio Analysis

FCFF 650 million outstanding shares Predicted value of 92.06% in 2010 Based on objective of matching the industry P/E of 15

650 million outstanding shares

Predicted value of 92.06% in 2010

Based on objective of matching the industry P/E of 15

Recommendation Strong reputation Dominates the industry Right Financial health to prosper and acquire new competition Short-run risks offset by diversified business competencies Heavy debt and the possibility of emissions legislation might adversely affect the company in the long run Recommendation: Buy Short Term

Strong reputation

Dominates the industry

Right Financial health to prosper and acquire new competition

Short-run risks offset by diversified business competencies

Heavy debt and the possibility of emissions legislation might adversely affect the company in the long run

Recommendation: Buy Short Term

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