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Caterpillar (CAT -4.6%) leads the DJIA lower (-0.8%) after Cummins slashes its 2012 outlook. Joy...

Caterpillar (CAT -4.6%) leads the DJIA lower (-0.8%) after Cummins slashes its 2012 outlook. Joy Global (JOY -6%) tumbles as well. The XLI -1.8%. More from Cummins (CMI): "Order trends in the U.S. for trucks and power generation equipment have softened and demand in Brazil, China, and India is not improving." Ouch.
Comments (14)
  • PalmDesertRat
    , contributor
    Comments (2739) | Send Message
     
    bot some cmi today at 86.30
    10 Jul 2012, 03:01 PM Reply Like
  • Joe Razorback
    , contributor
    Comments (281) | Send Message
     
    85.70 and dropping lol!! But for a long hold, prob a good price. For the short term who knows, might be able to get it for $75 in August
    10 Jul 2012, 03:22 PM Reply Like
  • DBLOCTON
    , contributor
    Comments (5) | Send Message
     
    I hope your right!! Will buy as much as I can!!
    10 Jul 2012, 03:29 PM Reply Like
  • Joe Razorback
    , contributor
    Comments (281) | Send Message
     
    How you like those $86.30 shares today? lol
    11 Jul 2012, 05:48 PM Reply Like
  • chopchop0
    , contributor
    Comments (3305) | Send Message
     
    I doubt he bought those shares planning to sell today.
    11 Jul 2012, 06:56 PM Reply Like
  • gcolston
    , contributor
    Comments (91) | Send Message
     
    This is a senseless sell-off of CAT.
    Earnings up, orders up, backlog huge, P/E low, dividend high.
    The big guys are buying your CAT stock as you sell it off cheap, silly people! Dividend pay-out in a few days too.
    10 Jul 2012, 03:30 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    It is called a value trap versus a value stock.
    10 Jul 2012, 03:45 PM Reply Like
  • gcolston
    , contributor
    Comments (91) | Send Message
     
    I don't see how a company that continues growth and profit in spite of an economic down-turn could be a value trap.
    10 Jul 2012, 10:44 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    There are concerns about CAT's growth going forward. If commodity prices continue to fall new projects will be shelved and companies will put off buying new equipment.

     

    Look back to 2008 when commodity prices collapsed and everyone cancelled orders and shelved projects. CAT was literally giving equipment away to get people to place orders for delivery.

     

    I know this because Osisko financed their mine in early 2009 and I was told that they literally saved hundreds of millions of dollars because equipment suppliers order books dried up.

     

    That is what makes it a value trap. While it looks cheap if you look at the economic climate there is a reason for the low PE. People are discounting the potential for a slowdown and order cancellations.
    11 Jul 2012, 02:42 AM Reply Like
  • chopchop0
    , contributor
    Comments (3305) | Send Message
     
    anyone buying? CAT and CMI both seem solid long-term at these levels. CMI even boosted their divvy
    10 Jul 2012, 03:32 PM Reply Like
  • eabyrd
    , contributor
    Comments (311) | Send Message
     
    Wouldn't touch any of them... got mostly out of $DE around 81 from 73. Would watch XLI to hit 33 before adding to any of these guys...
    10 Jul 2012, 04:08 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    XLI is on a downslide and XLY will join. Buy at the technical bottoms and watch the NAVs.
    10 Jul 2012, 04:24 PM Reply Like
  • eagle1003
    , contributor
    Comments (1523) | Send Message
     
    The "Big Boys" won't be buying at these levels. Ugly, ugly chart with a double top. This dog is going down to the mid sixties, at least.
    10 Jul 2012, 04:24 PM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    but BMW sales in China up 32% last quarter...go figure...maybe BMW makes a combine
    10 Jul 2012, 04:34 PM Reply Like
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