CAT SEES RECOVERY - BUT WHEN? - The CEO of Caterpillar, the large construction machinery firm, had mixed remarks this morning that sent the stock higher. He stated, “Looking forward, there is far too much uncertainty to know when the global economy will turn toward robust positive growth.” He also stated that CAT would be positioned to capitalize in the future no matter what happens.
BOTTOMLINE - The convoluted remarks from the CEO were enough to send the stock higher because the company also backed their previous guidance. Profit is expected to come in between $1.15 and $2.25 per share (a very wide range). Analysts are looking for $1.28 per share. The company also announced it was targeting annual profits of $8 to $10 per share within five years if the worldwide economy gets back to “normal”. I do believe this will occur and apparently others do as well and that is why CAT is rallying 4% in early trading. If you have CAT a P/E of 20 in five years on $9 per share in earnings you are looking at a stock price of $180! That is not my target, but I am just stating the numbers. Since hitting a low in March, the stock has more than doubled, but must rise another $40 to get back to the 2007 high of $87. | 
