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

| About: Caterpillar Inc. (CAT)
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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.

Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Jananne Copeland CAO April 30 9,110 No 6,869 shares 57.0%
Bradley Halverson CFO April 29 19,638 No 38,315 shares 33.9%
James Buda EVP April 29 33,548 No 57,282 shares 36.9%

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.

Month Insider selling / shares Insider buying / shares
April 2014 62,296 0
March 2014 0 0
February 2014 0 0
January 2014 45,713 0
December 2013 0 0
November 2013 0 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 3,720 0
April 2013 0 0
March 2013 0 0
February 2013 10,000 0
January 2013 81,061 0

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.

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.

Company CAT DE KMTUY VOLVY
Market Cap: 65.81B 34.35B 20.85B 31.92B
Employees: 116,579 67,044 46,730 95,533
Qtrly Rev Growth (yoy): 0.00 0.03 0.11 0.08
Revenue: 55.69B 38.03B 24.45B 40.93B
Gross Margin: 0.26 0.30 0.28 0.22
EBITDA: 8.96B 6.56B 4.05B 2.25B
Operating Margin: 0.10 0.14 0.12 0.03
Net Income: 3.83B 3.57B 1.91B 537.90M
EPS: 5.88 9.28 2.01 0.26
P/E: 17.85 10.02 10.91 59.62
PEG (5 yr expected): 1.32 1.38 1.69 N/A
P/S: 1.18 0.91 0.86 0.78

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

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

Company Insider buying / shares Insider selling / shares
DE 0 68,401
KMTUY N/A N/A
VOLVY N/A N/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.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.