Should Investors Pay Attention To These Insider Trades For Caterpillar Inc. (CAT)?

The stock of Caterpillar Inc. (NYSE:CAT) increased by $1.5 on Tuesday to finish at $205.65, up 0.73 percent. The last five days have seen an average of 3,745,960 shares of common stock traded. 10 times new highs were reached in the current year, with a fall of -$1.09. The average number of shares traded over the last 20 days was 3,179,480, while the average volume over the last 50 days totaled 3,155,820.

CAT stock dropped -5.10% since last month. On 05/20/22, the company’s shares reached a one-month low of $194.04. The stock touched a high of $246.69 on 04/21/22, after rallying from a low of $179.67 in 52 weeks. The price of CAT stock has declined by -0.53% or -$1.09 this year, reaching a new high 10 times. Still, the stock price is down -16.64% from the 52-week high.

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Insider Transactions

There have been 7 days since Caterpillar Inc. (CAT) last reported insider trading activity on May 18. On May 18, Group President Creed Joseph E sold 2,757 shares at $214.13 each. This transaction resulted in the insider making $590,356. On May 05, MacLennan David added 600 shares at a price of US$219.82. After the transaction, the insider now owns 2,480 shares. Group President De Lange Bob had earlier sold 11,718 shares on Apr 21 for $237.25 a share. The transaction was completed for $2,780,096.

Valuation Metrics

Caterpillar Inc. (CAT) has a trailing price-to-earnings (P/E) ratio of 17.35. Beta for the stock is 0.92. There are also a few other valuation ratios worth considering, including the trailing price-to-sales (P/S) ratio of 2.18, the price-to-book (PB) ratio of 6.44, and the price-to-cash flow ratio of 56.09.

Company paid $1.11 per share in dividends, remained unchanged from $1.11 last year. A $0.08 dividend increase was reported on Wednesday June 9 2021.

Financial Health

For the three months ended March 30, Caterpillar Inc.’s quick ratio was 0.90, while its current ratio was 1.40, indicating its inability to pay off its debt. The company’s long-term debt to equity ratio for the quarter ending March 30 is 1.48, and the total debt to equity ratio is 2.20. As far as profitability goes, gross margin for the trailing twelve months is 29.80% percent. Caterpillar Inc.’s operating margin stood at 13.10% for the same period. Based on annual data, it had gross profit of $15.46 billion and revenue of $50.97 billion.

Investors will also look at the performance of the company’s management in order to determine the potential profitability of their investment. CAT’s return on assets (ROA) during the last 12 months has been 7.90%. There was a 9.40% return on investment (ROI) in the past year. In the meantime, the return on equity (ROE) for the last 12 months was 38.80%.

Earnings Surprise

According to Caterpillar Inc.’s quarterly financial report for the quarter that ended March 30. A lower net income was reported in the quarter under review than the previous quarter. Net income for the quarter came in at $13.59 billion, while revenues rose by 12.52% to $13.8 billion. It was predicted that Caterpillar Inc.’s quarterly earnings would be $2.88, but it ended up being $2.6, beating the consensus by 10.80%. EBITDA was $2.52 billion for the quarter. At the end of Caterpillar Inc.’s most recent quarter ended March 30, its liabilities totaled 65.18 billion, while its total debt was $37.58 billion. Equity owned by shareholders amounts to $533.35 million.

Technical Picture

Here’s a quick look at Caterpillar Inc.’s (CAT) price momentum from a technical perspective. As of 24 May, the RSI 9-day stood at 46.13%, suggesting the stock is Neutral, with a 36.53% historical volatility rate.

The stochastic %K and %D were 29.12% and 27.34% respectively, while the average true range (ATR) was 7.44. Based on the 14-day stochastic reading of 39.88%, the RSI (14) reading is 45.40%. On the 9-day MACD Oscillator, the stock is at -3.01, and the 14-day reading is at -4.25.

Analyst Ratings

In its analyst report released on March 11, 2022, Wells Fargo began covering Caterpillar Inc. (NYSE: CAT). The stock was rated as an Equal weight by the brokerage firm. Analysts have assigned Caterpillar Inc. (CAT) an Overweight rating. CAT is a stock that is recommended for selling by 2 brokerage firms, while 10 companies recommend holding. The stock is underweighted by 1 analyst. Among the analysts who rate the stock, 2 rates it overweight and 12 others recommend it as a buy.

What is CAT’s price target for the next 12 months?

The current consensus forecast for the stock is between $164.00 and $350.00, with a median target price of $245.00. In analyzing these forecasts, the average price target given by analysts for Caterpillar Inc. (CAT) is $242.18.


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