Posted on 01/17/2015 7:05:54 AM PST by thackney
Caterpillar Inc. shares tumbled Monday as the company became the latest victim of the sliding price of oil.
Caterpillars stock CAT, -0.55% tumbled almost 6% after J.P. Morgan downgraded it to underweight from neutral on concerns about the companys direct exposure to oil and gas, and indirect exposure to mining, U.S. construction and emerging markets.
The maker of diggers and dozers direct exposure to the sector is equal to about $6.5 billion, or 12% of revenue, while its indirect exposure may be as much as 15% of revenues, analysts wrote in a note. That means almost 30% of its total revenue is facing pressure in 2015 and 2016.
Crude futures fell below $50 a barrel on Monday in the latest stage of the rout sparked by a glut of supply. See also: Here are the reasons oil is plunging toward $50.
Caterpillar supplies turbines to offshore rigs, as well as reciprocating engines and transmissions for on-site drilling. It also provides construction equipment that is used in infrastructure development, along with aftermarket and other services.
(Excerpt) Read more at marketwatch.com ...
HA! Another Jedi mind trick to try to get Americans to pine for higher gas prices.
That just means more Americans can now afford to buy Caterpillar stocks.
Just some reality for those expecting a booming economy from lower gasoline prices. Most don’t understand all the indirect jobs and business driven by the oil/gas industry in this country.
Ciarra gave us the price of oil but not the price of Caterpillar's stock.
Lower gas prices will benefit far more people than it will harm. My heart bleeds for the holders of Caterpillar stock but lower gas an oil prices is a good thing.
It’s not a mind trick, it’s the reality of there being 2 sides to every story. Cat makes a lot of stuff used by oil drillers, with oil prices low a lot of deposits are no longer profitable, oil drillers are having hard times, which means they aren’t buying as much from Cat. Every drop in price has winners and losers, every rise in price has winners and losers. What makes a price change generally good or bad is basically percentages, more folks win from dropping oil prices than lose, so it’s generally a good thing, but folks still lose.
Too many fail to realize oil prices are falling due to influence of a slowing global economy, particularly Europe and Asia.
Lumber, Copper, and others, those prices have fallen greatly as well.
At least those in retirement who put all their investment eggs in oil, gas and Caterpillar.
Those of us not in retirement benefit from lower gas, oil and Caterpillar. It means we can afford to buy more. So when the prices go back up, we can benefit from it.
Sorry. Markets go up and down. That's life.
You still don't understand how wide spread the oil industry helps/hurts many other areas of business.
Lower prices will speed up that slowing economy. That's how economies work.
No. You don’t understand markets. They go up and down. They need to go down so people can afford to get in them. Then they go up and those people benefit. Then they go down again so people can get in them. Then they go up so......get the picture?
I'm not suggesting anything different. I've been through boom/bust before, it is part of the reality of the oil/gas industry.
My point is, don't expect a booming economy because gasoline prices dropped significantly. We have been through big drops in price before. Notice none of the created a booming economy before either.
It's called "reality".
Why do you think I don't understand that? My point is, the industry is not so isolated from other businesses as some people think.
Truckers and ordinary consumers will certainly benefit from lower gas prices.
Unless your trucking business is hauling, water, material, oil, pipe, valves etc for the oil industry.
Well those people are stupid.
Bottom line is lower gas and oil prices is a good thing for far more people than it's a bad thing.
I'm just not going to shed a tear for Caterpillar or those invested in Caterpillar. Hell, as far as I know, my mutual fund may be invested in Caterpillar. But that just means I will be able to buy more Caterpillar for a while.
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