Comments on: Caterpillar’s Earnings http://ContrarianEdge.com/2009/07/21/caterpillars-earnings/ Vitaliy Katsenelson blog on the economy, stock market, and stocks. Applying Active Value Investing approach. Fri, 18 May 2012 08:51:00 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Daniel M. Ryan http://ContrarianEdge.com/2009/07/21/caterpillars-earnings/comment-page-1/#comment-190501 Daniel M. Ryan Wed, 22 Jul 2009 05:16:35 +0000 http://ContrarianEdge.com/?p=1149#comment-190501 From a turnaround perspective, another bright spot can be found in Caterpillar's cash-flow statement. The first quarter of this year saw an increase in both cash flow from operations and free cash flow from the first quarter of '08. That's the same quarter that saw Caterpillar post a loss. However, that point largely pertains to dividend sustainability; 2Q's cash flow report may tell a different story. I think you're right about Caterpillar being a buy only when its earnings have been wrecked. That rule usually holds for cyclical stocks. From a turnaround perspective, another bright spot can be found in Caterpillar’s cash-flow statement. The first quarter of this year saw an increase in both cash flow from operations and free cash flow from the first quarter of ’08. That’s the same quarter that saw Caterpillar post a loss.

However, that point largely pertains to dividend sustainability; 2Q’s cash flow report may tell a different story. I think you’re right about Caterpillar being a buy only when its earnings have been wrecked. That rule usually holds for cyclical stocks.

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