How Should Investors View Caterpillar Inc. (CAT) Insider Trading?

As of Wednesday close, Caterpillar Inc.’s (NYSE:CAT) stock was down -$8.54, moving down -4.35 percent to $187.83. The average number of shares traded per day over the past five days has been 4,225,340 shares. 1 time new highs have been achieved over the past 5 days, with a -$18.86 fall in that time frame. In the last twenty days, the average volume was 2,995,620, while in the previous 50 days, it was 3,189,232.

Since last month, CAT stock retreated -5.05%. Shares of the company fell to $187.71 on 06/22/22, the lowest level in the past month. A 52-week high of $237.90 was reached on 04/21/22 after having rallying from a 52-week low of $179.67. Since the beginning of this year, CAT’s stock price has dropped by -9.15% or -$18.91, and marked a new high 10 times. However, the stock has declined by -21.05% since its 52-week high.

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Caterpillar Inc. (CAT) last reported insider trading activity 36 days ago on May 18. Creed Joseph E, the Group President of the company, disposed of 2,757 shares for $214.13 on May 18. It resulted in a $590,356 divestment by the insider. MacLennan David added 600 shares at an average price of $219.82 on May 05. The insider now owns 2,480 shares following the transaction. On Apr 21, Group President De Lange Bob sold 11,718 shares at $237.25 apiece. The transaction was valued at $2,780,096.

Valuation Metrics

Right now, Caterpillar Inc. (CAT) has a P/E ratio of about 15.85. The stock’s beta is 0.93. Besides these, the trailing price-to-sales (P/S) ratio of 1.92, the price-to-book (PB) ratio of 5.88, and the price-to-cash flow ratio of 49.56 may also be considered.

The latest dividend of $1.20 per share was paid out, which is 8.11% more than last year’s $1.11. On Wednesday June 8 2022, a $0.09 dividend increase was announced.

Financial Health

In the three months ended March 30, Caterpillar Inc.’s quick ratio stood at 0.90, while its current ratio was 1.40, showing that the company is not able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending March 30 was 1.48, and the total debt-to-equity ratio was 2.20. On the profitability front, the trailing twelve-month gross margin is 29.80% percent. In the year ended March 30, operating margins totaled 13.10%. Based on annual data, CAT earned $15.46 billion in gross profit and brought in $50.97 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 9.40%. Return on equity (ROE) for the past 12 months was 38.80%.

In Caterpillar Inc.’s quarter-end financial report for March 30, it reported total debt of $9.64 billion. According to the earnings report, the company had a lower net income in the recent quarter than it did in the previous quarter. CAT’s revenue rose 12.52% to $13.8 billion during the quarter, while net income inched up to $13.59 billion. While analysts expected Caterpillar Inc. to report $2.6 quarterly earnings, the actual figure was $2.88 per share, beating the consensus estimate by 10.80%. During the quarter, the company generated $2.52 billion in EBITDA. The liabilities of Caterpillar Inc. were 65.18 billion at the end of its most recent quarter ended March 30, and its total debt was $37.58 billion. The value of shareholders’ equity is $533.35 million.

Technical Picture

This quick technical analysis looks at Caterpillar Inc.’s (CAT) price momentum. With a historical volatility rate of 32.04%, the RSI 9-day stood at 25.10% on 22 June.

With respect to its five-day moving average, the current Caterpillar Inc. price is down by -9.12% percent or -$18.86. At present, CAT shares trade -7.99% below its 20-day simple moving average and -11.47% percent below its 100-day simple moving average. However, the stock is currently trading approximately -13.45% below its SMA50 and -10.71% below its SMA200.

Stochastic coefficient K was 5.94% and Stochastic coefficient D was 5.79%, while ATR was 7.05. Given the Stochastic reading of 0.28% for the 14-day period, the RSI (14) reading has been calculated as 31.24%. As of today, the MACD Oscillator reading stands at -11.06, while the 14-day reading stands at -18.68.

Analyst Ratings

Wells Fargo launched its rating on Caterpillar Inc. (NYSE: CAT) to an Equal weight in a note to investors on March 11, 2022. Caterpillar Inc. (CAT) has been rated Overweight by analysts. According to 2 brokerage firms, CAT is a sell, and 11 firms recommend it is a Hold. There are 1 analyst who say the stock is underweight. A total of 2 analysts rate Caterpillar Inc. stock as buy, with 12 recommending it as overweight.

With a median target price of $240.00, the current consensus forecast for the stock is $164.00 – $350.00. Based on these forecasts, analysts predict Caterpillar Inc. (CAT) will achieve an average price target of $239.91.


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