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Caterpillar Stock Analysis
 

Caterpillar Stock Analysis

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    Caterpillar Stock Analysis Caterpillar Stock Analysis Presentation Transcript

    • 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 Profile
      • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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