Price Don’t Lie: Could Caterpillar Inc. See a Reversal After Having a Gap Up Today?

Price Don't Lie: Could Caterpillar Inc. See a Reversal After Having a Gap Up Today?

The stock of Caterpillar Inc. (NYSE:CAT) gapped up by $0.49 today and has $136.92 target or 56.00% above today’s $87.77 share price. The 6 months technical chart setup indicates low risk for the $50.92B company. The gap was reported on Oct, 14 by Barchart.com. If the $136.92 price target is reached, the company will be worth $28.52 billion more.
Gaps up are useful for using as a support level and to some extent as a tradeable event. If investors already hold the stock and experience a price gap up, then its usually a good idea to hold the stock for a stronger up move. Back-tests of these patterns indicate that two-thirds of the times the stock performance improves after the gap. The area gaps close 89% of the time, the breakaway gaps, 2%, the continuation gaps 4% and the exhaustion gaps 61%. About 2.71M shares traded hands. Caterpillar Inc. (NYSE:CAT) has risen 19.46% since March 11, 2016 and is uptrending. It has outperformed by 14.01% the S&P500.

Analysts await Caterpillar Inc. (NYSE:CAT) to report earnings on October, 27. They expect $0.73 EPS, down 2.67% or $0.02 from last year’s $0.75 per share. CAT’s profit will be $423.51 million for 30.06 P/E if the $0.73 EPS becomes a reality. After $1.09 actual EPS reported by Caterpillar Inc. for the previous quarter, Wall Street now forecasts -33.03% negative EPS growth.

Caterpillar Inc. (NYSE:CAT) Ratings Coverage

Out of 22 analysts covering Caterpillar Inc. (NYSE:CAT), 7 rate it a “Buy”, 3 “Sell”, while 12 “Hold”. This means 32% are positive. Caterpillar Inc. has been the topic of 43 analyst reports since July 27, 2015 according to StockzIntelligence Inc. The stock of Caterpillar Inc. (NYSE:CAT) earned “Sell” rating by S&P Research on Friday, October 23. The stock of Caterpillar Inc. (NYSE:CAT) earned “Neutral” rating by Citigroup on Wednesday, July 27. The stock of Caterpillar Inc. (NYSE:CAT) earned “Neutral” rating by Goldman Sachs on Monday, December 7. The firm earned “Sell” rating on Monday, January 25 by Goldman Sachs. BMO Capital Markets maintained the stock with “Market Perform” rating in Friday, September 25 report. The rating was maintained by Citigroup on Friday, September 25 with “Neutral”. The company was initiated on Friday, September 25 by Barclays Capital. Robert W. Baird downgraded the shares of CAT in a report on Friday, September 4 to “Neutral” rating. The stock has “Buy” rating given by Deutsche Bank on Wednesday, September 7. Axiom Capital initiated Caterpillar Inc. (NYSE:CAT) rating on Thursday, September 24. Axiom Capital has “Sell” rating and $28 price target.

According to Zacks Investment Research, “Caterpillar Inc is the world’s largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is one of only a handful of U.S. companies that leads its industry while competing globally from a principally domestic manufacturing base. The company records more than half of its sales to overseas customers. Their products are used in the construction, road building, mining, forestry, energy, transportation and material-handling industries.”

Insitutional Activity: The institutional sentiment decreased to 0.85 in 2016 Q2. Its down 0.20, from 1.05 in 2016Q1. The ratio fall, as 76 funds sold all Caterpillar Inc. shares owned while 363 reduced positions. 40 funds bought stakes while 331 increased positions. They now own 396.23 million shares or 3.43% less from 410.29 million shares in 2016Q1.
Wealth Planning Limited Liability Com holds 7,272 shares or 0.42% of its portfolio. Toronto Dominion National Bank & Trust has 6,000 shares for 0% of their US portfolio. Cullinan Associate has 0.14% invested in the company for 22,230 shares. Legal & General Gp Public Lc last reported 0.22% of its portfolio in the stock. Schwab Charles Investment Mngmt has 0.24% invested in the company for 2.49M shares. Webster Savings Bank N A last reported 0.06% of its portfolio in the stock. Hudson Valley Investment Advsr Adv holds 0.13% or 5,314 shares in its portfolio. Mutual Of America Management Ltd Liability has 67,879 shares for 0.11% of their US portfolio. Markston Intl Ltd Com holds 0.83% or 117,286 shares in its portfolio. The Connecticut-based Hartford Mngmt Inc has invested 0.63% in Caterpillar Inc. (NYSE:CAT). Gfs Advisors Ltd Liability Co owns 79,265 shares or 1.45% of their US portfolio. Mckinley Carter Wealth Services owns 3,086 shares or 0.12% of their US portfolio. Livforsakringsbolaget Skandia Omsesidigt holds 0.17% of its portfolio in Caterpillar Inc. (NYSE:CAT) for 50,413 shares. Td Asset Mngmt has 959,702 shares for 0.13% of their US portfolio. Quest Mngmt Or last reported 0.08% of its portfolio in the stock.

Insider Transactions: Since April 26, 2016, the stock had 3 insider buys, and 4 sales for $1.77 million net activity. Muilenburg Dennis A bought $80,099 worth of Caterpillar Inc. (NYSE:CAT) on Monday, May 9. $1.94M worth of shares were bought by CALHOUN DAVID L on Tuesday, April 26. $67,479 worth of Caterpillar Inc. (NYSE:CAT) shares were sold by Halverson Bradley M. Copeland Jananne A. also sold $58,563 worth of Caterpillar Inc. (NYSE:CAT) shares.

More important recent Caterpillar Inc. (NYSE:CAT) news were published by: Fool.com which released: “Better Buy: Caterpillar Inc. vs. Deere” on October 11, 2016, also Fool.com published article titled: “Better Buy: Caterpillar Inc. vs. Illinois Tool Works”, Fool.com published: “Excited About Caterpillar Inc.’s Latest Big Buy Rating? Think Again” on September 27, 2016. More interesting news about Caterpillar Inc. (NYSE:CAT) was released by: Prnewswire.com and their article: “Caterpillar Inc. to Announce Third-Quarter 2016 Financial Results on October 25” with publication date: October 11, 2016.

CAT Company Profile

Caterpillar Inc. (Caterpillar), incorporated on March 12, 1986, is a maker of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Firm operates through its three product divisions: Resource Industries, Construction Industries, and Energy & Transportation. The Firm also provides financing and related services through its Financial Products segment. The Firm offers its products under the brand names Caterpillar, CAT, design versions of CAT and Caterpillar, Electro-Motive, FG Wilson, MaK, MWM, Perkins, Progress Rail, SEM and Solar Turbines. The Firm operates parts distribution centers at various locations, including Morton, Illinois; Mossville, Illinois; Arvin, California; Denver, Colorado; Miami, Florida; Atlanta, Georgia; St. Paul, Minnesota; Southaven, Mississippi; Clayton, Ohio; Houston, Pennsylvania; York, Pennsylvania; Waco, Texas; Van Alstyne, Texas; Duffield, Virginia; Spokane, Washington; Melbourne, Australia; Stapylton, Australia; Queensland, Australia; Grimbergen, Belgium; Piracicaba, Brazil; Shanghai, China; Dortmund, Germany; Lunen, Germany; San Luis Potosi, Mexico; Singapore, Republic of Singapore; Moscow, Russia; Johannesburg, South Africa, and Dubai, United Arab Emirates.

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