Quote:
Originally Posted by QuikSand
Here's a quick stab at things. Not getting on top of the mountain and predicting what's going to happen with everything... just picking a few stocks, that's all.
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Caterpillar (CAT)
Not exactly a “stimulus package” play (I think any reasonable effect of a stim program is already built into prices, sadly), but rather a pretty standard cyclical play. With the economy and real estate both massive depressed, this construction-related blue chip is trading at embarrassingly low ratios – right now its P/E ratio is around 7, that’s just silly (earnings may dent that short term, admittedly). This company is **not** going out of business. The dividend is not a firm one from year to year – but at today’s rates, that itself is around a 4% yield at today’s prices of around $40. Highway robbery for what sits right now as a great value stock.
Forecast: eventually the world starts building shit again, and we need big rigs to move dirt around. CAT makes them. Stock goes to $56 or better in two years, and the dividend is pretty secure. |
been meaning to pick up CAT based on the reasoning above - but glad i've procrastinated considering it's down 25% since the pick was made