- Caterpillar (CAT +3.3%) shoots higher in early trading following a Barron's weekend article that says the company has used the mining and oil drilling downturns to prepare for a rebound that could begin next year, and send shares should have an "excellent chance" of returning 20% over the next year.
- CAT’s goal during downturns is to limit the decline in operating profit to 30% of the decline in revenue, and the company is surpassing the goal after falling short in past cycles, according to the report.
- CAT's net debt is just $3B, and last year the company generated $4.5B in free cash flow; this year it could produce $4B for a free cash yield of 8.6%, and the strong financial position affords plenty of flexibility.