The Stray CAT Strut
Black and yellow stray CAT sittin’ on a fence.
Caterpillar’s (NYSE: CAT) got enough dough to pay the rent. It’s far from flat broke, but Wall Street don’t care.
CAT stock drops down leaving red in the air…
Stray Cats, Mr. Great Stuff? You’re reaching here…
True, but did you really want The Very Hungry Caterpillar?
Don’t answer that…
So anyway, blue-chip industrial conglomerate Caterpillar just reported what should have been blockbuster Q2 financials.
Should have been?
Yeah, should have been. Am I typing too quietly?
Let’s look at the numbers:
Earnings per share: $3.18 versus $3.03 expected.
Revenue: $14.2 billion versus $14 billion expected.
Both revenue and earnings were up from 2021 results, and Caterpillar says it expects to finish the year strong:
So overall, Caterpillar appears to be doing quite well, right?
As usual, the devil is in the details. Total equipment sales jumped about 7%, but the underlying data was mixed.
For instance, Caterpillar saw North American sales soar 20%, while Asia-Pacific sales plummeted 17%. Furthermore, sales also dipped about 7% in Europe, the Middle East and Africa.
What’s more, analysts are somewhat doubtful that Caterpillar will see strong demand for the rest of 2022.
You see, Caterpillar sells directly to dealers … not to customers. Dealer sales declined 4% in Q2 and are expected to fall further in the second half of the year — mainly due to slowing demand out of China.
And if that wasn’t enough, Q2 gross margins fell from 13.9% to 13.6% for Caterpillar. In other words, rising materials costs, labor “shortages” and supply chain issues are boosting Caterpillar’s costs.
As a result, CAT stock fell nearly 4% today … despite what appeared to be a beat-and-raise quarter for Caterpillar.
In my somewhat professional opinion, if you’re holding CAT stock … this report is no reason to sell. In fact, the closer CAT stock comes to $180 — an area of price support for the shares — the more CAT looks like a buy.
Now, I’m not officially adding CAT to the Great Stuff Picks portfolio, but if CAT is your jam, and you’re carefree and wild … the stock has plenty of upside despite a turbulent market.
You’re a real gone guy, Mr. Great Stuff.
Yeah, well, I mean, it’s got CAT class and it’s got CAT style, after all.
Why Must I Chase The CAT?
Yeah, this is a story of a famous dog. Andrew Keene came close to losing it all … but he discovered something that in just two years helped him earn back 10 TIMES more than he lost.
Now, in the midst of global chaos, he’s revealing his secret to the investing public, so they can sidestep inflation, protect their savings and emerge on the other end unscathed.
Name a better duo than Uber (NYSE: UBER) and massive losses? I’ll wait … just like I’m waiting for an earnings report where Uber actually delivers for investors.
Are you still sour that Uber Eats “forgot” your order that one time?
No … well, yes … but thanks for the reminder. Jeez. Anyway, Uber missed Wall Street’s already-low expectations with a per-share loss of $1.33, compared with estimates for a $0.25 loss.
On the relatively “bright” side, overall gross bookings came in at $29.1 billion and beat estimates for $28.8 billion, thanks to higher-than-expected rider bookings … and no thanks to lower-than-expected delivery bookings.
So a mega miss on earnings and a narrow revenue beat — how’d Uber do it?
As you’d expect from a company that (barely) gets by with a little help from its non-employee friends, more drivers signed up to drive for Uber, meeting the growing demand for transportation … and desperation for side hustles.
Inflation just be like that, and CEO Dara Khosrowshahi specifically shouted out the rising cost of living as a reason why driver sign-ups shot up 77% this past year.
Alright, so Uber’s still losing tons of cash. It’s getting more expensive just to exist, let alone drive and go out. (Might as well embrace the hermit life, at this point.)
Oh, and oil giants like BP PLC (NYSE: BP) are beating earnings expectations by insane margins.
I don’t know about y’all, but I’m starting to see a connection here…
BP, aka Billionaire Printer PLC, just reported a profit of about $8.5 billion — way ahead of the Street’s consensus target for $6.3 billion and waaaaaay ahead of the $2.8 billion BP reported this time last year.
The company also announced a 10% dividend hike with promises of more dividend increases to follow.
Since BP still had a few extra billions burning a hole in its gold-lined coffers, the company plans to buy back another $3.5 billion in stock. As if BP didn’t have a whole hydrogen-power business it could funnel that cash into, but I digress…
Surprised? You really shouldn’t be. Especially if you’ve looked at a fuel pump or a gas bill in the past year. What can I say? It’s good to be the king — er, BP.
Wait, I thought you said the same thing about the banks?
Mmm, sun chips. Salty, savory, crispy … silicon wafers.
What? You’ve not been up on the roof installing panels and thought about biting into one of those scrumptious solar-sapping semiconductors?
You’re right, you have been indoors too long.
I mean … have you been outside lately? Ow. Other than the blinding light, it feels like you’re boiling alive.
No, thanks. No, thanks.
But I’m sure more than a few solar energy users (and investors) are rejoicing in the sunshine.
For its part, SunPower (Nasdaq: SPWR) reported a double-beat earnings report — quite a narrow one, but a double beat nonetheless. The maker of solar panels and systems brought in a record 19,700 new customers last quarter, up 51% year over year.
Revenue? That’s up an unheard-of 63%. No wonder SPWR stock shot up over 14% after the report dropped, bringing SPWR up 36% in the past week.
But that’s not the last of today’s sunshiney news…
Pop quiz! What do you need for cars to “see” their surroundings?
Umm. Sunlight? Those weird eyelashes for VW Bugs?
What? No, I thought we left those in 2005. I just gave you the answer, silly: Lidar is the underrated, behind-the-scenes revolution that’s happening to the auto industry.
While everyone’s jazzed up about Dylan EVs going electric, don’t forget about that whole “self-driving” shebang.
Volkswagen sure didn’t forget: The automaking goliath just announced it chose Innoviz (Nasdaq: INVZ) to supply self-driving tech to VW’s software division, Cariad.
Innoviz will directly work with Volkswagen, Audi, Porsche and other VW brands to “support safe mobility for vehicles launching from the middle of the decade.” Your car can’t safely drive itself — and you — if the car literally has no idea where it’s going, right?
Works just fine for Grandma. No, wait a second…
The announcement drove INVZ up 21%. It’s a major deal with the world’s second-biggest automaker — of course INVZ is going to soar after the announcement.
Interested in lidar tech? ‘Course you are. Click here to see what’s next for the lidar market. (Hint: It’s exactly why Musk is so paranoid about lidar lapping at Tesla’s tail…)
Keep The Great Stuff Flowing!
Before y’all set out into the sunset, just remember: The Great Stuff action you know and love doesn’t have to end here. No, siree. Have you checked out…
Cool it, Great Stuff, I got the point. You’ve said this every day for a week. You made a TikTok. You got me subscribed to it, and I’m sharing the link with everyone I know. What else is new?
Wow, I wasn’t even gonna go for the shameless plug route, but thanks … I guess?
The one thing all y’all should be checking out (other than our TikTok) is Mike Carr. Don’t, like, physically check him out … he gets kinda shy with all the uber-fans and gawkers, don’t’cha know?
But do check out what Mike Carr just did with Bitcoin: If you’ve bought and held bitcoin from 2015, you turned $250 into about $20,000. Not too shabby … if you had the stomach to hold through multiple 80%-plus drawdowns and two 50% declines in the last year alone.
But get this… Mike recently perfected a trading system that would’ve handed you five times better gains. That $250 in 2015? It’s $106,000 now.
Of course, if you’d like to share your thoughts on today’s insanity or share your own off-the-wall thoughts, email in! Write to us at GreatStuffToday@BanyanHill.com.
In the meantime, here’s where you can find our other junk — erm, I mean where you can check out some more Greatness:
Editor, Great Stuff