Morningstar Rating

Stock Research and Analysis

by Kwame Webb, CFA

Bulls Say

Operators of Caterpillar's equipment appreciate the company's extensive dealer network and its ability to maximize uptime on construction and mining equipment.
In 2014, the company will continue to restructure its supply chain to reduce its breakeven manufacturing levels and push more production risk to its suppliers.
Caterpillar’s North American construction business continues to benefit from an equipment upgrade cycle from its customers. Read more 

Bears Say

Caterpillar has a significant global market share position, but it trails Komatsu's market share in the large Chinese market.
A decision to write off 80% of the value of the ERA Mining Machinery acquisition due to inflated receivables and accounting irregularities raises some concerns about Caterpillar's ability to successfully conduct international acquisitions.
The company is more levered toward coal mining than natural gas extraction. A push to limit coal consumption in the U.S. and China (the two largest coal consumers in the world) is a net negative headwind for the company. Read more 

Management

Caterpillar’s CEO Doug Oberhelman joined the company in 1975 and was head of the engine division before becoming CEO in 2010. Brad Halverson, formerly the vice president of financial services, is now CFO. Many of Caterpillar’s senior leaders have spent   Read more 

Profile

Peoria, Illinois-based Caterpillar is the world’s largest manufacturer of heavy construction and mining equipment. It is also a major manufacturer of engines and turbines   Read more 

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