Kamal Ahuja

Terex Valuation Driven to Dirt Amidst Street Rubble

Hi, I am the author of this article. I would like to clarify that when I discussed western construction practices as a growth driver for construction and heavy equipment manufacturers, I was implying the use of sophisticated and novell equipment such as truck mounted telescopic boom cranes and concrete pumps. The examples illustrated on the use of manual labor and lifting are based on typical observations and not measurement.

Terex: Overlooked Bargain

TEX reported very good quarterly results yesterday, with strength in cranes and mining overshadowing some weakness in aerial work platforms and roadbuiding. I am pleased to see the company buying $500 million of its own stock (reaffirms faith in their own business outlook). But what really amazed me this week was CAT revenue guidance of $50 billion for 2008. Did you know $50 billion was Jim Owens (CAT Chairman/CEO) target for 2010? Both CAT and TEX are down $2 -$3 this morning. AP reports that "shares of heavy equipment maker Caterpillar fall as investors eye projected steel-price hikes". The market always needs something to worry about! CAT announced corresponding price increases to offset rising materials costs. I believe that both companies are excellent buying opportunities at this price level.