Tuesday, August 4, 2015

Recent Buy

Dividend Growth Stock Blog

Hello,




New month. Fresh capital. New purchase.


If you follow my blog, CAT appeared again on my August Screen.




The screen essentially looks for companies that have their PEs below their median PE and yield above their median yields. Moreover, in this month my focus is on companies with wide moat.


CAT is a very cyclical company. There will be some good years and some lean years. The industry is tied to the economies of the world. Unfortunately, the world's economies are not growing.


This potentially means opportunities for DGI hunters.





The other issue is the high debt to equity ratios. However, this is the norm for the construction and farming industries.




Now, the price. My fair value ballpark is in the high 70s to low 80s. Therefore, at around $77, I think the price is just below fair value.


Date
Action
Security
Price
Quantity
Amount
8/3/2015
Buy
CAT
76.88
20
$1544.55


Now, based on some analysts, they predict up to a -7% growth EPS CAGR over 3 years. According to my EPS plot in my analysis, the price and EPS have a tight correlation. All this mumble jumble basically means the price can go down further. Who knows?


However, I will be happy to average down a couple more times if this happens.


That's it for all. Did you make any recent purchases?

D4s

2 comments:

  1. CAT is one of the hottest stocks right now in the community. Nice pickup and comments on it. I will look to average down as well if it continues its decline!

    ReplyDelete
  2. Adam,
    Thanks for visiting. It's strange today - I was driving back home from work, and they are doing construction on the road. All I see were CAT trucks and equipment everywhere! I am sure they will be okay!
    I am glad to be a fellow shareholder!
    D4s

    ReplyDelete