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Summary

  • Three insiders sold Caterpillar's stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • All 3 of these insiders decreased their holdings by more than 10%.

Caterpillar (NYSE:CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide.

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Insider selling during the last 30 days

Here is a table of Caterpillar's insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Jananne CopelandCAOApril 309,110No6,869 shares57.0%
Bradley HalversonCFOApril 2919,638No38,315 shares33.9%
James BudaEVPApril 2933,548No57,282 shares36.9%

There have been 62,296 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Caterpillar's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 201462,2960
March 201400
February 201400
January 201445,7130
December 201300
November 201300
October 201300
September 201300
August 201300
July 201300
June 201300
May 20133,7200
April 201300
March 201300
February 201310,0000
January 201381,0610

There have been 202,790 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Caterpillar reported the first-quarter financial results on April 24 with the following highlights:

Revenue$13.2 billion
Net income$922 million
Cash$5.3 billion
Debt$38.1 billion

All three of these insiders sold their shares after these results.

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Caterpillar's revenues peaked in 2012.

Outlook

Caterpillar's 2014 guidance is as follows:

Revenue$56 billion plus or minus 5%
EPS$5.55

Competition

Caterpillar's competitors include Deere & Company (NYSE:DE), Komatsu (OTCPK:KMTUY), and AB Volvo (OTCPK:VOLVY). Here is a table comparing these companies.

CompanyCATDEKMTUYVOLVY
Market Cap:65.81B34.35B20.85B31.92B
Employees:116,57967,04446,73095,533
Qtrly Rev Growth (yoy):0.000.030.110.08
Revenue:55.69B38.03B24.45B40.93B
Gross Margin:0.260.300.280.22
EBITDA:8.96B6.56B4.05B2.25B
Operating Margin:0.100.140.120.03
Net Income:3.83B3.57B1.91B537.90M
EPS:5.889.282.010.26
P/E:17.8510.0210.9159.62
PEG (5 yr expected):1.321.381.69N/A
P/S:1.180.910.860.78

Caterpillar has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider activities this year.

CompanyInsider buying / sharesInsider selling / shares
DE068,401
KMTUYN/AN/A
VOLVYN/AN/A

Deere & Company has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Caterpillar, and there have not been any insiders buying Caterpillar during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Caterpillar has an insider ownership of 0.23%.

Before going short Caterpillar, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/S ratio, flat revenue growth, and the intensive insider-selling activity.

Source: Caterpillar: 3 Different Insiders Have Sold Shares During The Last 30 Days