(CAT) Caterpillar, a stock that I own, will continue to own and love to own

And I would buy it if I did not own it. On a friend’s Blog (I hope Devyani won’t complain…) I found a good post about Caterpillar. She gives good reasons to buy. I would follow her advice and buy, but I already own CAT. Actually, thanks to my “free stock strategy” I own 6 shares that I got for free :-).

Caterpillar is good because, we the people can understand what they produce (a picture may help us…)

Caterpillar is good because Caterpillars are needed by BRIC (=Brazil, India, Russia, China) to build their skyscrapers, highways, airports… CAT is good because it is needed to dig commodities badly needed by BRIC deeper and deeper in world’s mines. Caterpillar is good because (as Devyani explains) it is a well managed company.

CAT is also good because it pays a 1.8% dividend yield.

Last but not least, CAT has numbers I like:

Trailing P/E: 13.00, Forward P/E : 10.94 (cheap and expected to grow).

Qtrly Revenue Growth: 13.90% , Qtrly Earnings Growth : 4.30% (it has an OK growth)

Debts are also under control (about half of the yearly Revenue).

And, last but not least! CAT has a PEG ratio expected in the next 5 years of 0.85, which is excellent even for a growth stock. The PEG ratio is something I discovered lately, even though it has been there for years. PEG is Price/(Earnings*growth). I will explain better this PEG in another Post (once I have understood it better!). For now I can say that such a low PEG under 1 means that, by buying Caterpillar, a proletarian investor buys future growth of earnings at a very reasonable price.

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2 responses to “(CAT) Caterpillar, a stock that I own, will continue to own and love to own”

Devyani

February 26, 2007

Hey,

Thanks for your comment on my CAT post.
I am very happy to see you mentioning my posts in your blog.

Devyani

deminvest

February 26, 2007

I need to thank you for your good job, which is helping me make better decision on how to invest my hardly earned bucks.

It seems that we have a different approach on looking at companies. Our blogs complete each-other when we look at the same stock.

I decided to write my opinions about CAT only after reading your Post about CAT. I am sure it will be useful to my (2 or 3) readers to click on the link and read what you think.

Deminvest Jack

Devyani

February 26, 2007

Hey,

Thanks for your comment on my CAT post.
I am very happy to see you mentioning my posts in your blog.

Devyani

deminvest

February 26, 2007

I need to thank you for your good job, which is helping me make better decision on how to invest my hardly earned bucks.

It seems that we have a different approach on looking at companies. Our blogs complete each-other when we look at the same stock.

I decided to write my opinions about CAT only after reading your Post about CAT. I am sure it will be useful to my (2 or 3) readers to click on the link and read what you think.

Deminvest Jack

BUY, SELL, KEEP