Salem Investment Counselors Inc. Cuts Stock Holdings in Caterpillar Inc. $CAT

Key Points

• Salem Investment Counselors trimmed its stake in Caterpillar by 4.1% to 49,130 shares (about $28.15M), while large institutions aggressively increased exposure—Norges Bank opened a roughly $2.17B position and Wellington added ~5.1M shares—leaving institutional ownership near 71%.
• Insiders have been net sellers, offloading 135,950 shares worth about $94.33M in the last three months, including Denise C. Johnson's 39,138-share sale (~$26.66M) and CFO Andrew Bonfield's 10,000-share sale (~$5.75M), with insiders now holding ~0.33% of the stock.
• Caterpillar reported a quarterly beat (EPS $5.16 vs. $4.67; revenue $19.13B vs. $17.81B) and the stock is trading higher, but valuation is elevated (P/E ~37.3) with analysts averaging a $730.50 target and mixed ratings (including HSBC's $850 buy).

Salem Investment Counselors Inc. reduced its stake in shares of Caterpillar Inc. (NYSE:CAT - Free Report) by 4.1% during the fourth quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 49,130 shares of the industrial products company's stock after selling 2,120 shares during the quarter. Caterpillar accounts for approximately 0.8% of Salem Investment Counselors Inc.'s portfolio, making the stock its 26th largest holding. Salem Investment Counselors Inc.'s holdings in Caterpillar were worth $28,145,000 as of its most recent SEC filing.

A number of other hedge funds and other institutional investors also recently modified their holdings of the stock. Norges Bank bought a new position in Caterpillar during the 2nd quarter worth approximately $2,165,899,000. Wellington Management Group LLP lifted its position in Caterpillar by 3,949.8% in the third quarter. Wellington Management Group LLP now owns 5,228,058 shares of the industrial products company's stock valued at $2,494,568,000 after purchasing an additional 5,098,964 shares during the last quarter. Massachusetts Financial Services Co. MA boosted its stake in shares of Caterpillar by 1,851.8% during the third quarter. Massachusetts Financial Services Co. MA now owns 1,830,414 shares of the industrial products company's stock valued at $873,382,000 after purchasing an additional 1,736,631 shares during the period. Marshall Wace LLP grew its holdings in shares of Caterpillar by 425.2% in the second quarter. Marshall Wace LLP now owns 761,800 shares of the industrial products company's stock worth $295,738,000 after purchasing an additional 616,739 shares during the last quarter. Finally, Bank of New York Mellon Corp grew its holdings in shares of Caterpillar by 20.7% in the third quarter. Bank of New York Mellon Corp now owns 3,553,930 shares of the industrial products company's stock worth $1,695,757,000 after purchasing an additional 609,023 shares during the last quarter. Institutional investors own 70.98% of the company's stock.

Insider Transactions at Caterpillar

In related news, insider Denise C. Johnson sold 39,138 shares of the company's stock in a transaction on Monday, February 2nd. The stock was sold at an average price of $681.08, for a total value of $26,656,109.04. Following the sale, the insider directly owned 43,350 shares of the company's stock, valued at $29,524,818. This represents a 47.45% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CFO Andrew R. J. Bonfield sold 10,000 shares of the stock in a transaction on Wednesday, December 31st. The stock was sold at an average price of $575.06, for a total value of $5,750,600.00. Following the completion of the transaction, the chief financial officer owned 45,460 shares of the company's stock, valued at approximately $26,142,227.60. This trade represents a 18.03% decrease in their position. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 135,950 shares of company stock worth $94,327,990. 0.33% of the stock is owned by insiders.

Wall Street Analyst Weigh In

A number of equities research analysts recently commented on the stock. Rothschild & Co Redburn upped their price target on shares of Caterpillar from $650.00 to $700.00 and gave the company a "neutral" rating in a report on Wednesday, February 4th. Barclays boosted their price objective on shares of Caterpillar from $610.00 to $625.00 and gave the company an "equal weight" rating in a research report on Friday, January 30th. UBS Group reiterated a "neutral" rating and set a $677.00 target price on shares of Caterpillar in a report on Monday, February 2nd. Sanford C. Bernstein reissued a "market perform" rating and issued a $678.00 target price on shares of Caterpillar in a research note on Friday, January 30th. Finally, HSBC boosted their price target on Caterpillar from $660.00 to $850.00 and gave the company a "buy" rating in a report on Thursday, February 5th. Sixteen equities research analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat.com, Caterpillar presently has an average rating of "Moderate Buy" and an average target price of $730.50.

Caterpillar News Roundup

Here are the key news stories impacting Caterpillar this week:

• Positive Sentiment: Zacks raised its earnings outlook for Caterpillar, forecasting higher EPS — a direct positive for investor expectations and support for the stock after Caterpillar’s January quarter beat. Zacks Research Forecasts Higher Earnings for Caterpillar
• Positive Sentiment: A Chicago Tribune editorial highlights Hyundai Translead’s large Joliet manufacturing investment and broader regional manufacturing momentum; such industrial investments can indirectly lift demand for heavy equipment, parts and services that benefit suppliers like CAT. Editorial: Gov. JB Pritzker gets a big win with Hyundai Translead’s splashy Joliet investment
• Neutral Sentiment: Human-interest coverage referencing “caterpillars” as food for songbirds — not related to Caterpillar Inc.’s business; minimal investor impact. ‘The great munching’: Caterpillars’ gluttony means food for baby songbirds
• Neutral Sentiment: Feature on interactive machines at an Illinois museum — raises local brand visibility but has little bearing on fundamentals. The Massive Interactive Machines At This Illinois Museum Will Blow You Away
• Negative Sentiment: A Seeking Alpha piece warns that while data‑center demand tailwinds for Caterpillar are real, current valuation appears to price in aggressive growth that may be unrealistic — a caution for multiple expansion and a potential cap on further upside if growth slows. Caterpillar: Data Center Tailwinds Are Real, But Valuation Assumes Unrealistic Growth

Caterpillar Trading Up 3.0%

NYSE:CAT opened at $701.38 on Tuesday. The company has a 50-day moving average price of $703.39 and a 200-day moving average price of $597.63. The stock has a market cap of $326.34 billion, a price-to-earnings ratio of 37.27, a P/E/G ratio of 1.61 and a beta of 1.53. The company has a current ratio of 1.44, a quick ratio of 0.94 and a debt-to-equity ratio of 1.44. Caterpillar Inc. has a 12 month low of $267.30 and a 12 month high of $789.81.

Caterpillar (NYSE:CAT - Get Free Report) last released its quarterly earnings results on Thursday, January 29th. The industrial products company reported $5.16 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.67 by $0.49. Caterpillar had a net margin of 13.14% and a return on equity of 45.76%. The company had revenue of $19.13 billion during the quarter, compared to the consensus estimate of $17.81 billion. During the same period in the prior year, the firm earned $5.14 earnings per share. Caterpillar's revenue was up 17.9% on a year-over-year basis. Equities analysts predict that Caterpillar Inc. will post 19.86 EPS for the current year.

Caterpillar Profile

Caterpillar Inc is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and locomotives. The company's product portfolio includes earthmoving machines such as excavators, bulldozers, wheel loaders and off‑highway trucks, as well as a range of power generation products including generator sets and power systems for industrial and commercial use. Caterpillar serves customers across heavy construction, mining, energy, transportation and related industries with both equipment and integrated technology solutions.

In addition to manufacturing, Caterpillar provides a broad range of aftermarket parts and support services, including maintenance, repair, remanufacturing and fleet management tools.

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